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- If short-run economic profits are greater than zero for firms in a monopolistically competitive market, in the long run we expect: A. competing firms to enter the market and sell similar products. B. profits to increase. C. the demand curve for firms in the market to shift to the right. D. entry barriers to prevent competing firms from entering this market.2. Draw a diagram depicting a firm that is making a profit in a monopolistically competitive market. Now show what happens to this firm as new firms enter the industry.3rd question Which of the following statements are true about BOTH monopolistic competition AND monopolies? Check all that apply a) price is above marginal cost b) firms can earn positive profit in the long run c) firms earn zero profit in the long run d) firms are not price takers
- Economics Fixed costs do not play a role in determining output levels. So, why will lower fixed costs increase the number of firms in a monopolistic competitive industry?1. Consider a monopolistically competitive market of hair salon. Glamour Hair Salon is one of the many firms in the market best known for their hair spa service. They have been running the business for 30 years already. With this, imagine its long run equilibrium.Monopolistically competitive firms: A. incur losses in both the short run and long run. B. may realize either profits or losses in the short run, but realize normal profits (zero economic profits) in the long run. C. realize economic profits in both the short run and long run. D. realize normal profits (zero economic profits) in the short run but losses in the long run.
- The table is for a monopolistic competitive firm in the short run. What will the firm's profit equal in the long run? Question 1 options: $0 $91 $102 $228Monopolistically competitive firms can earn above-normal economic profits in the short run. (a) In a few sentences, explain what will happen in the long run that will prevent monopolistically competitive firms from continuing to earn above-normal economic profits.4. Is monopolistic competition efficient? Suppose that a company operates in the monopolistically competitive market for pickleball paddles. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. (?) PRICE (Dollars per paddle) 100 R 60 50 40 30 20 10 0 0 MC ATC MR 10 20 30 40 50 60 QUANTITY (Thousands of paddies) 70 Demand 80 90 100 + Mon Comp Outcome Min Unit Cost Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that at the optimal quantity for each firm. Further, a monopolistically competitive firm's average total cost in long-run equilibrium is…
- 3. Is monopolistic competition efficient? Suppose that a firm produces wooden train engines in a monopolistically competitive market. The following graph shows its demand curve, marginal- revenue (MR) curve, marginal-cost (MC) curve, and average-total-cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. ? PRICE (Dollars per engine) 100 90 80 70 60 50 40 30 20 10 MC ATC MR 0 + Demand H 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of engines) Mon Comp Outcome Min Unit Cost Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that optimal quantity for each firm. Furthermore, the quantity the firm produces in long-run equilibrium is True or False: This indicates…2.32 CATEGORIZATION What type of market is it? In part A, determine whether each market listed is an example of Perfect Competition (PC) or Monopolistic Competition (MC). In part B, determine whether each item is a characteristic of Perfect Competition or Monopolistic Competition, or both (PC and MC). Circle your answer choices. A. 1. РC MC breakfast cereal 2. PC MC wheat 3. PC 4. PC MC fast food MC milk 5. PC MC video rentals . PC MC large number of buyers and sellers 7. РС MC the seller "takes" the market price 8. РС MC the seller aims to maximize profit 9. PC MC the most competitive market structure 10. PC MC the product is homogeneous B.What is the first item to identify when determining the short-run equilibrium for a monopolistically competitive firm? a. the total profits b. the total revenue C. the total costs d. the profit-maximizing level of output
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