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- what market inefficiencies derive from monopolies and monopolistic competition?You're the manager of a firm that has constant marginal cost of $6. Fixed cost is zero. The market structure is monopolistically competitive. You're faced with the following demand curve: $12 10 Price 8 6 4 2 0 3 Demand 100 200 300 400 500 600 Quantity Show Transcribed Text a. Determine graphically the profit-maximizing price and output for your firm in the short run. Demonstrate what profit or loss you'll be making. (Please draw a graph) b. What happens in the long run?Which of the following are characteristics of monopolistic competition in the long run A. blocked entry into the market □ B. zero economic profit □ C. full efficiency □ D. lower production than competitive markets
- Exercise A.7. If you were thinking about getting into the ice cream business, would you try to make an ice cream exactly like the (successful) brands that already exist? Explain your decision using the ideas about monopolistic competitionQuestion 5 The diagram below illustrates a firm under monopolistic competition: Label the curves Curve I, Curve II, Curve III, Curve IV. Graphically identify profit maximizing output and price Explain how the amount of profit is defined at the maximum-profit output.4 . Conditions for monopolistic competition PLEASE HELP ME
- Which of the following statements is true about the difference between monopoly and monopolistic competition? a.Monopolies always earn positive profits b.Monopolistically competitive firms have no barriers to entry or exitWhen production is undertaken by a monopolistic firm as opposed to a firm in a perfectly competitive market, we generally observe that a. More is produced and there is a loss in surplus. b. More is produced and surplus is increased. C. Less is produced and there is a loss of surplus. d. Less is produced and there is an increase in surplusExercise A.3. Does a monopolistic competitor produce too much or too little compared to the most efficient level? What practical considerations make it difficult for public authorities to solve this problem?
- Illustrate a monopolistic market using a supply and demand diagram. Show on your graph what price and quantity prevail in this market. a. Show on your graph what price and quantity would have prevailed under perfect competition.1) Are monopolists guaranteed of making economic profits?. pleas explain.2) Explain the long run equilibrium situation for a monopolistically competitive industry. Give two examples of industries that fit under this category.a) Using the following graph state the price and quantity the firm will be at if the monopolistic competition market is in long run equilibrium. Explain why the firm will be at that price and quantity. Price P1 MC ATC B P 2 P3 P4 P5 MR D Q2 Q3 Quantity b) State the conditions that establish the market structure monopolistic competition, and state how the market adjusts to long run equilibrium and what is different about long run equilibrium for this market structure.
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