Panel (a) MC Panel (b) Panel (c) MC MC ATC ATC ATC D= P MR D =P MR D= P MR Output (Q) Output (Q) Output (Q) Which of the three panels above shows a monopolistically competitive firm making a negative Economic Profit (loss)? Select one: O a. None of the panels shows a firm making a loss. O b. Panel (b) O c. Panel (c) Denel (e) $ $

Panel (a) MC Panel (b) Panel (c) MC MC ATC ATC ATC D= P MR D =P MR D= P MR Output (Q) Output (Q) Output (Q) Which of the three panels above shows a monopolistically competitive firm making a negative Economic Profit (loss)? Select one: O a. None of the panels shows a firm making a loss. O b. Panel (b) O c. Panel (c) Denel (e) $ $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that in short-run equilibrium, a particular monopolistically competitive restaurant (Applebee's) charges $12 for each order of Chicken Parmesan and sells 52 orders per day. The average total cost (ATC) for those 52 orders is $10. How much revenue will the firm take in each day? $ What will be the firm's economic profit or loss on Chicken Parmesan? Next, suppose that other restaurants add/remove chicken parmesan from their menus (entry or exit occurs) and a long-run equilibrium is established. If the Applebees daily Chicken Parmesan orders remain at 52 units, what price will it be able to charge? $ What will be its economic profit or loss?
Exhibit 10.5 Price 3.25 3.00 2.50 0 700 1,000 MC MR ATC D = AR Quantity Exhibit 10.5 shows the demand, marginal revenue, and cost curves for a monopolistically competitive firm. At the profit-maximizing (or loss-minimizing) output and price, the firm would O a. have to expand to stay in business in the long run. O b. be better off shutting down, since total revenue does not cover fixed costs. O c. be experiencing an economic loss. O d. be earning an economic profit. O e. be earning zero economic profit.
In monopolistic competition, which of the following most accurately describes the long run equilibrium conditions for a firm? O P>ATC; MR=MC; P>MC O P>ATC; MR>MC; P=MC O P=ATC; MR=MC; P>MC OP=ATC; MR=MC; P=MC O P=ATC; MR>MC; P>MC
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.
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 even
graphically operate where demand is inelastic? Complete either parts c and d OR parts e and f. c. Which of the four forms of industry competition have advertiking? Why is for its product is inelastic? Why does it NOT want to advertising experienced in this/these form(s) of competition and not experienced I. in the other form(s) of competition? d. Which type(s) of industry competition, of the four studied, displayed allocative efficiency? Does allocative efficiency exist in the short-run, long-run, or both? Which type(s) of industry competition exhibits mutual interdependence? Why is it experienced in this type(s) of industry competition and not the other type(s)? f Why does monopolistic competition exhibit excess capacity? What type of efficiency is not being realized because of it? To achieve this type of efficiency, what should happen to the number of firms within this industry?
Fill in the blank and answer in 5-6 sentence only
The firm in the figure below is in monopolistic competition. It will set a price equal to MC ATC MR D 0 10 20 30 40 50 60 Quantity (units per day) O a. $1. O b. $3. O c. more than $3. O d. $2. Price and costs (dollars per unit)
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Generally, the food and beverage industry can be classified as an example of a monopolistic competition market. Thus, in the long-run, a firm in monopolistic competition normally produces at an output level where the; a. P = ATC and MR > MC. O b. P> ATC and MR > MC. O c. P> ATC and MR = MC. O d. P = ATC and MR = MC.
Suppose that a monopolistically competitive restaurant is currently serving 250 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal. Instructions: Enter your answers as a whole number. a. What is this firm's profit or loss? $ b. Will there be entry or exit? (Click to select) Will this restaurant's demand curve shift left or right? (Click to select) In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. Suppose that the allocatively efficient output level in long-run equilibrium is 210 meals. c. What is the firm's profit? $ d. Is this firm's deadweight loss greater than or less than $90? (Click to select)
Given your understanding of the various market structures, use the information contained in the diagram below to answer the following questions. Price and cost per unit a Pa No co P₂ P₁ 0 0₁ o o, o What is the monopolistic competitor's profit-maximizing price? a) P3 Ob) P2 O c) Pl d) PA Q₂ MC MR Domand ATC Quantity