Question 15The graph shows the marginal cost curve, average total cost curve, demand curve, and marginal revenuecurve of a firm in monopolistic competition in long-run equilibrium.Draw a point at the firm's profit-maximizing output and price. Label it 1.Draw a point to show the firm's efficient scale and its average total cost at that output. Label it 2.Draw a horizontal arrow that indicates the firm's excess capacity. Label it.Price and cost (dollars per pair)50-40-30-20-10-MRD50100150Quantity (pairs of blue jeans per day)MCATC200

A monopolist sets a price in order to sell a smaller number. It indicates that fewer quantities are…

Answered: Question 15 The graph shows the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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MI ATC What's happening here for a firm in a monopolistic competition market? The firm is losing money in the short run and will shift the ATC function down. The firm is making a profit in the short run and will reduce ATC to the minumum point. The firm is making a profit in the short run and may expand output over time. The firm is losing money in the short run and may leave the market eventually.
Question: Discuss why a monopolistically competitive industry is considered "wasteful" of economic resources. Discuss any benefits from a monopolistically competitive industry.
Identify a monopoly, oligopoly, and monopolistically competitive firm. Explain your reasoning to the market characteristics
Question 2 please
Answer the question on the basis of the following short run demand and cost data for a specific firm. Cost Data (2) Price $ 80 76 Demand Data (1) Price 72 68 • decrease. • increase. $ 35 30 25 . 20 15 2 3 10 5 4 5 6 (3) Quantity 7 8 2 3 4 5 64 60 56 In the long run, the number of firms in this monopolistic competitive industry will most likely Multiple Choice 6 Total Output 7 8 Total Cost stay the same. The answer cannot be determined from the given data. $45 55 70 90 115 145 180
A. How does the demand curve faced by the firm in monopolistically competitive market differ from the demand curve faced by a firm participating in a purely competitive market? b. How does that impact how the firm sets its price and the quantity the firm produces?
Explain your reasons 1.If demand is elastic, the difference between the monopolistic price and the competitive market price would be greater compared to when the elasticity is low. 2. In 2011, heavy rain and cold weather destroyed 10 percent of the world coffee products. Therefore, it is expected that people consume less coffee.
Question 1 When a firm in monopolistic competition is earning a positive economic profit, which of the following will occur? firms will enter the market and the firm's perceived demand curve shifts left. firms exit the market and the firm's perceived demand curve shifts right. firms enter the market and price increases. firms exit the market and price falls.
The accompanying graph depicts average total cost (ATC) marginal cost (MC), marginal revenue (M), and demand (D) 50 facing a monopolistically competitive firm MC 45 Place point A at the firm's profit maximizing price and quantity 40 35 What is the firm's total cost? ATC 30 25 total cost: 20 15 What is the firm's total revenue? 10 5 total revenue: $ MR 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity What is the firm's total profit? profit: $ Price and Cost ($)
The graph shows the demand curve, marginal revenue curve, and marginal cost curve of Java Time, Inc., a producer of espresso machines in monopolistic competition. Draw a point at the firm's the profit-maximizing price and quantity. Label it 1. Draw an arrow that shows Java Time's markup. Draw the average total cost curve such that Java Time does not have excess capacity. Label it. Draw a point at the intersection of the ATC curve and the MC curve. Label it 2. Java Time's markup is $a machine. 240 220- 200- 180- 160- 140 120- 100- 80- 60- 40- 20- 04 0 Price and cost (dollars per machine) MC 100 200 300 400 Quantity (espresso machines per week) D MR 500
do fast.
Macmillan Learning Increasing Returns to Scale and Monopolistic Competition Starting from the long-run trade equilibrium in the monopolistic competition model, as illustrated in the accompanying figure, consider what happens when industry demand D increases. For instance, suppose that this is the market for cars, and lower gasoline prices generate higher demand D. a. Show the resulting shift in the D/NT, d, and mr curves. Assume the price increases to $13. Place point A on the new short-run equilibrium. Price 09876 20 19 18 17 16 15 11 10 9 8 7 6 5 4 3 2 1 0 mr D/NT d A • AC MC 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity

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