In an industry comprised of three companies, which are small-scale manufacturers or an easily replicable product unprotected by brand recognition or patents, the most representative model of company behavior is: O oligoply. O perfect competition. monopolistic competition.
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A: Option (3).
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- 1) Assume that the percentage change of the price of product A is 5% (%Px and the percentage change of quantity demanded is - 10% (%Δqd), Find the following, a) The price elasticity of demand b) Is the demand for this product elastic or inelastic? c) If the price of the product A increases, What happens to total revenue? (increases or decreases) d) if the price increases by 1% by how much quantity demanded will decrease (more than 1%, less than 1%, or by exactly by 1%) 2) Assume that the percentage increase in the price of product X ( %ΔPx) is 4% and the percentage change in quantity demanded in product Y ( %Δqd) is -5%, find the cross price elasticity (Eyx), are product X and Y substitutes or complements? 3) Assume that the percentage increase in income (%ΔI) is 4% and the percentage decrease in the quantity demanded (%Δq) is -6%, find income elasticity (EI), Is this product a normal or inferior product? 4) Is the elasticity for Corn flakes cereal is greater of less…Question 29 Monopolistic competition is characterized by excess capacity because: O the demand for a product is perfectly elastic in this type of industry. O firms charge a price that is less than marginal cost. O firms are always profitable in the long run. O firms produce at an output level less than the least-cost output.Compare and contrast the similarities and differences between perfect competition andmonopoly.
- QUESTION 1 Press F11 to exit full screen Which firm would earn profit in the long-run? O a monopolist firm. O a monopolistically competitive firm. O an oligopoly firm. O a perfectly competitive firm. QUESTION 2 Refer to the graph below for a monopolistically competitive firm. ↑Price MC 160 140 ATC 123.33 Demand 90 56.67 MR 100 133.33 154.92 Quantity If the above firm chose to produce at 100 units then the firm will be O earning a profit O incurring a loss O there is no profit and no loss O the firm can earn, profit, loss or break evenExplain the difference in market power between perfectly competitive firms and monopolistically competitive firms. Which firms have more control over prices and/or output? Why? What are some industry examples of each type of market structure?i. Why does interdependence of firms play a major role in oligopoly but not monopoly? ii. Explain the difference between the budget constraint and indifference curve at consumer optimum. iii. Describe the relationship between the marginal product and the total product of a firm?
- Using a pizza business as a firm in its appropriate market model; identify the following aspects that would apply to this business. Select all the statements that would apply to this business. If the statement does not apply, leave it blank. Select 4 correct answer(s) Each pizza business would be able to offer unique pizza choices. OA pizza business would be considered part of a monopolistically competitive market. Each producer would be able to choose the price they charge for their various size pizzas. The cost to start a pizza business could be considered low to moderate with few limitations. The costs to start a pizza business would require significant infrastructure, and be extremely capital-intensive. all nizzas are the same. Mostiy cloudyWhich of the following describes the long run equilibrium for a firm in monopolistic competition with free entry? Select one: O Price = Average Total Cost, Price > Marginal Cost O Price > Average Total Cost, Marginal Revenue = Marginal Cost O Price > Average Total Cost, Price = Marginal Cost O Price = Average Total Cost, Marginal Revenue > Marginal CostThe profit-maximizing/loss-minimizing level of output is determined where MR=MC for: all four industry types. pure competition and monopolistic competition. only pure competition. only regulated monopoly. Question 40 Graph A Graph B Graph C Graph D AR AR AR AR-MR WR AMR `MR Referencing the above diagram, Graphs A, B, C, and D, respectively, represent which of the following market models? Monopolistic competition, monopoly, oligopoly, and pure competition. Pure competition, oligopoly, monopoly, and monopolistic competition. O Oligopoly, pure competition, monopolistic competition, and monopoly. Oligopoly, monopoly, pure competition, and monopolistic competition.
- 11. In which market structure will a firm choose to stay in business (i.e. not shut down) when PSamurai Sam's, a producer of frozen sushi, is a monopolistically competitive firm. The firm is currently selling frozen California rolls at a $4 price. Samurai Sam's marginal cost is $1.75 and its marginal revenue is $1.50. The firm should ________ to maximize profits in the short run. Question 7Answer a. continue to produce the same output level b. decrease output to where marginal revenue just equals marginal cost c. increase output to where marginal revenue just equals marginal cost d. Indeterminate from the given information.Explain, with the aid of a graph, the short run equilibrium position of a firm operating in the monopolistic competitive market structure". Marks will be awarded for your ability to integrate theory with the scenario provided.