Profit Maximization Suppose that a monopolistically competitive restaurant is currently serving 260 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? 520 Entry Will this restaurant's demand curve shift left or right? Left 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 size of the firm's economic profit? $ d. Is the deadweight loss for this firm greater than or less than $90? 460 Less than

Profit Maximization Suppose that a monopolistically competitive restaurant is currently serving 260 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? 520 Entry Will this restaurant's demand curve shift left or right? Left 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 size of the firm's economic profit? $ d. Is the deadweight loss for this firm greater than or less than $90? 460 Less than

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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Pleas : Explain the long run equilibrium situation for a monopolistically competitive industry. Give two examples of industries that fit under this category. thank you
A monopolistically competitive firm in a long-run equilibrium will likely produce which of the following? A. a technically efficient amount of outputB. less than a technically efficient amount of output and less than an allocatively efficient amount of outputC. more than a technically efficient amount of output but less than an allocatively efficient amount of outputD. an allocatively efficient amount of production.E. less than a technically efficient amount of output and more than an allocatively efficient
Suppose the market for fast-food value meals is monopolistically competitive, with many restaurants selling their own brand of food. Assume the restaurants in the industry behave optimally by maximizing profit. The figure to the right represents the market for one monopolistically competitive firm's value meals. How will this figure change as the market moves toward long-run equilibrium? In the long run, O A. the average cost curve and the marginal cost curve will shift up because the firms are currently making profit. O B. the demand curve will shift to the left and become more elastic because the firms are currently making profit. nothing will change because monopolistically competitive markets have barriers to new firms entering. OC. O D. the demand curve will shift to the right and become more elastic because the firms are currently experiencing losses. O E. nothing will change because the firms in this market are breaking even. Price and cost (per value meal) 8.00- 7.60- 7.20 6.80…
What does it mean to say that: “A firm operating under perfect competition conditions is a price taker"?Why Can't this firm set any price it chooses? What if it operates in a monopolistically competitive market, would it be able to set the price? Why? Give some real life examples to support your answer.
Refer to the above graph for a representative firm in monopolistic competition in a constant-cost industry. This firm is a in both short-run and long-run equilibrium. b in short-run equilibrium, but not long-run equilibrium. c in long-run equilibrium, but not short-run equilibrium. d not in either short-run or long-run equilibrium.
3. Below are data for a monopolistically competitive firm. Quantity $MC SAC SMR. 60 82 72 50 71 64 44 64 56 4 48 59 48 50 57.2 40 6. 52 56.3 32 7 54 56 24 60 56.5 16 a. Refer to the information above to answer this question. What output will this profit-maximizing firm produce? b. Refer to the information above to answer this question. What is true if the firm is producing at the profit -maximizing output
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5- 3- 1- 20 40 60 80 100 Q MR Using the above graph, This profit-maximizing firm will produce Blank 1 units. -MC What price will this profit-maximizing firm charge? $Blank 2 (Do NOT enter the '$' in your response. Enter only the whole dollar amount; do NOT enter cents.) If the industry was perfectly competitive instead of monopolistic, then market output would be Blank 3 units and market price would be $Blank 4. (Do NOT enter the '$' in your response. Enter only the whole dollar amount; do NOT enter cents.) Blank 1 Blank 2 Blank 3 Blank 4 Add your answer Add your answer Add your answer Add your answer
Figure 16-9 The figure is drawn for a monopolistically-competitive firm. ↑Price MC 140 ATC 123.33 Demand. 90 56.67 MR. 100 133.33 Quantity Refer to Figure 16-9. Efficient scale is reached Oa. at 100 units. Ob. between 100 and 133.33 units. OC. at 133.33 units. Od. beyond 133.33 units.
Study Tools ins ess Tips ss Tips PRICE (Dellars per engine) 288 RSS #RR 100 50 30 20 10 MO 0 0 10 ATC MR Demand 20 30 40 50 70 DO 90 QUANTITY (Thousands of engines) 100 Mon Comp Outcome Min Unt Cost Decause this market is a monopolistically competitive market, you can tell that it is in long-run equilibrum by the fact that optimal quantity. Furthermore, a monopolistically competitive firm's average total cost in long-run equilibrium is average total cost. at the the minimum