QUESTION 22For monopolistically competitive firms in long-run equilibrium:the demand curve must intersect average total cost at its minimum.the demand curve must be tangent to the average total cost curve at its minimum.at the profit-maximizing quantity, the demand curve must intersect the average total cost curve quantity.at the profit-maximizing quantity, the demand curve must be tangent to the average total cost curve.

A monopolistically competitive market is a type of market structure characterized by a large number…

Answered: QUESTION 22 For monopolistically…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 5CQQ

See similar textbooks

Similar questions

Make a case for why monopolistically competitive industries never reach long-run equilibrium.
Mm.44. Subject:- Economy
None
mj Subject-Economics
8. The following graph represents a monopolistically competitive firm in the short-run: Price 50 MC 45 + ATÇ 40 35 30 25 D 20 15 + 10 + 5+ MR + 10 20 30 40 50 60 70 80 Buantity a) If this firm is maximizing profit, which quantity will it produce? b) If this firm is maximizing profit, which price will it charge? c) If this firm is maximizing profit, how much profit will it earn? d) What will happen to price, quantity, and profits in the long-run?
None
#3) Draw a diagram of the long run equilibrium in a monopolistically competitive market. How is price related to average total cost? How is price related to marginal cost?
7. The figure shows the monopolistically competitive market for smartphones. Plot the profit-maximizing price and quantity on the graph. Is this producer earning positive or negative profits in the short run? In the long run, will supply or demand for this producer's good be affected? Will economic profits increase or decrease for this producer?
Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. PRICE (Dolars per kit) 100 8 80 70 50 8 10 0 MO 10 ATC 20 30 O True O False MR 60 70 QUANTITY (Thousands of kits) Demand 40 80 90 100 Mon Comp Outcome Min Unit Cost Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that firm. Further, a monopolistically competitive firm's average total cost in long-run equilibrium is True or False: This indicates that there is excess capacity in the market for kits. at the optimal quantity for each the minimum average total cost.
!
Bob competes in a monopolistically competitive market. Suppose some new firms enter the market, causing his perceived demand curve to shift. The following tables show Original Demand Curve his demand curves, before and after the change, and his cost information. Price Quantity TC Assume that Bob can only choose from the quantities of output given in the table. By how much will his profit change after these new firms enter the market? $33 $20,000 $32 1,000 $30,000 $31 2,000 $45,000 $30 3,000 $70,000 $29 4,000 $100,000 New Demand Curve Price Quantity TC $30 $20,000 $29 1,000 $30,000 $28 2,000 $45,000 $27 3,000 $70,000 $26 4,000 $100,000 O his profits will not change O decrease by $9,000 O increase by $11,000 O decrease by $11,000
3. Discuss the long debate of economists whether there is a significant loss of well-being to society in markets that are monopolistically competitive rather than perfectly competitive

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou…

Economics

ISBN:

9781285165875

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou…

Economics

ISBN:

9781285165875

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Principles of Microeconomics

Economics

ISBN:

9781305156050

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Microeconomics (MindTap Course List)

Economics

ISBN:

9781305971493

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Microeconomics A Contemporary Intro

Economics

ISBN:

9781285635101

Author:

MCEACHERN

Publisher:

Cengage

SEE MORE TEXTBOOKS