Compare the average cost and the output in the long-run equilibrium for a monopolistically competitive firm and a perfectly competitive firm bycompleting the following table.Average CostOutputUnder...(Dollars per jacket)(Thousands of jackets per month)Monopolistic CompetitionPerfect CompetitionBecause this market is a monopolistically competitive market, the firm's average cost in long-run equilibrium isthe long-runaverage cost it would achieve as a firm operating in a perfectly competitive market.The output of a monopolistically competitive firm in long-run equilibrium isthe output of a perfectly competitive firm. Thisdifference in output is known as theof a monopolistically competitive firm. Suppose that a firm produces wool jackets in a monopolistically competitive market. The following graph shows its demand curve (D), marginalrevenue curve (MR), marginal cost curve (MC), and long-run average cost curve (LRAC). Assume that all firms in the industry face the same coststructure.Place the tan point (dash symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next,place the purple point (diamond symbol) to indicate the point at which this firm would produce in the long run if it operated in a perfectly competitivemarket.Note: Dashed drop lines will automatically extend to both axes.(?)10090Monopolistic Competition Outcome807060Perfect Competition OutcomeLRAC5040302010MCMR102030405060708090100QUANTITY (Thousands of jackets per month)PRICE, COSTS, AND REVENUE (Dollars per jacket)

In a monopolistic competitive firm there are large number of firms selling similar but not identical products whereas in a perfectly competitive firm there are large number of firms selling identical products thus prior has some market power whereas later has not. HINT:

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Economics

mpare the average cost and the output in the long-run equilibrium for a monopolistically competitive firm and a perfectly competitive firm mpleting the following table. Average Cost Output Under... (Dollars per jacket) (Thousands of jackets per month) lonopolistic Competition Perfect Competition cause this market is a monopolistically competitive market, the firm's average cost in long-run equilibrium is the long-run erage cost it would achieve as a firm operating in a perfectly competitive market. e output of a monopolistically competitive firm in long-run equilibrium is the output of a perfectly competitive firm. This erence in output is known as the of a monopolistically competitive firm.

mpare the average cost and the output in the long-run equilibrium for a monopolistically competitive firm and a perfectly competitive firm mpleting the following table. Average Cost Output Under... (Dollars per jacket) (Thousands of jackets per month) lonopolistic Competition Perfect Competition cause this market is a monopolistically competitive market, the firm's average cost in long-run equilibrium is the long-run erage cost it would achieve as a firm operating in a perfectly competitive market. e output of a monopolistically competitive firm in long-run equilibrium is the output of a perfectly competitive firm. This erence in output is known as the of a monopolistically competitive firm.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How would you best describe the economic profit (or loss) at the profit maximizing quantity q* in the long run for a monopolistically competitive firm? a) both a profit and a loss b) a profit c) a loss d) neither a profit nor a loss Is this monopolistically competitive firm efficient in production in the long run? Please state yes, no, it depends, and explain why in a few words or a formula. MC ATC 0 MR D
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