Question 26If firms in a competitive price-searcher (monopolistic competitive) market are currently earningeconomic losses, then in the long run,new firms will enter the market, and the current firms will experience a decrease indemand for their products until zero economic profit is again restored.new firms will enter the market, and the current firms will experience an increase indemand for their products until zero economic profit is again restored.some existing firms will exit the market, and the remaining firms will experience anincrease in demand for their products until zero economic profit is again restored.some existing firms will exit the market, and the remaining firms will experience a decreasein demand for their products until zero economic profit is again restored.

The question is asking about the long-term adjustments in a monopolistically competitive market when…

Answered: Question 26 If firms in a competitive…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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As firms enter and exit a monopolistically competitive market, what happens to productive efficiency in the long run? Group of answer choices 1-Productive efficiency will not be reached because in the long run, economic profits reach equilibrium. 2-Prices will rise to unprecedented levels, and productive efficiency will be reached. 3-The strongest firms will survive and the market will morph into an oligopolistic market. 4-Price will eventually intersect the average cost curve at a point where price > average cost, and productive efficiency will not be reached
Beatrice's Birthday Cakes operates in a monopolistically competitive market, so it is one bakery among many in the market for birthday cakes. The following table presents cost and revenue data for birthday cakes at Beatrice's. Quantity Produced (Units) 0 1 2 3 4 5 6 7 8 Costs Total Cost (Dollar 25 28 32 37 43 50 58 67 77 Marginal Quantity Cost (Dollars) (Units) Demanded 0 1 2 3 4 5 6 7 8 Revenues Price (Dollars per unit) 60 54 48 42 36 30 24 18 12 Total Marginal Revenue Revenue (Dollars) (Dollars) Refer to Table 16-4. What is the profit-maximizing output for Beatrice's Birthday Cakes? O a. 6 cakes Ob. 3 cakes
Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. PRICE (Dollars per scooter) 500 450 400 350 300 250 200 150 100 50 Co 0 0 "MC 50 100 ATC MR Demand 150 200 250 300 350 400 450 500 QUANTITY (Scooters) Monopolistically Competitive Outcome Profit or Loss
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Scenario: You have been invited for a job interview to Armenian Tobacco, a company producing and selling cigarette products in Armenia and abroad. Before going to interview you discussed it with your friends and you all agreed that the cigarettes' market structure can be considered as monopolistically competitive. Upon arriving to the interview you receive a short questionnaire, as follows: Armenian Tobacco is developing its strategy for the next few years, and among others we would like to know your opinion about the following points: 1) We would like to increase our advertising expenditures abroad as we believe it will enable us to gain more market share in our overseas operations. What is your opinion about advertising expenditures and their economic purpose? 2) There is a certain threat that in the future the World Health Organization will make all the countries to remove any labeling from cigarette boxes – all the boxes of all cigarettes area going to be the same without any…
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This profit-maximizing firm will produce Blank 1 units. 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.)
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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Answer choices are first blank: negative, positive, zero second blank: an equal number of, fewer, more

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