The figure below depicts a monopolistically competitive firm operating in the short run. Label the diagram with the items listed to the right of the figure. You will have to decide whether the firm is making a profit or a loss. Profit Price OF 25 OF 50 QUESTIONS COMPLETED ------ -------- MR MC Quantity D ATC Loss Average total cost Profit- maximizing price Profit- maximizing output < 39/50 > SUBMIT AN

The figure below depicts a monopolistically competitive firm operating in the short run. Label the diagram with the items listed to the right of the figure. You will have to decide whether the firm is making a profit or a loss. Profit Price OF 25 OF 50 QUESTIONS COMPLETED ------ -------- MR MC Quantity D ATC Loss Average total cost Profit- maximizing price Profit- maximizing output < 39/50 > SUBMIT AN

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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 figure below shows the demand (D, MR) and cost (MC, ATC) curves for Gwen's Country Curtains, operating in a monopolistically competitive industry. Demand and cost conditions facing Gwen's Country Curtains MC Dollars 80 0 ATC 1,000 MR Number of curtains per month Suppose Gwen's Country Curtains is currently producing 1000 curtains per month at a price of $80. In the short run, this company is and in the long run, it should expect to a. earning zero profit; earn zero profit b. suffering a loss; earn zero profit c. suffering a loss; shut down d. making a profit; earn zero profit
The following graph shows cost curves for a monopolistically competitive firm. Place the black point (cross symbol) on the graph to indicate the short-run profit-maximizing price and quantity for a monopolistically competitive firm. 500 450 PRICE PER UNIT (Dollars) 400 350 300 250 200 150 100 50 50 MC 0 0 50 100 150 LRAC MR Demand 200 250 300 350 400 450 500 QUANTITY (Units) + Monopolistically Competitive Outcome The following graph shows cost curves for a perfectly competitive firm. Place the grey point (star symbol) on the graph to indicate the point where a perfectly competitive firm would produce. ? 500 450 400 350 300 * Perfectly Competitive Outcome
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
WataDine is one of a city’s many restaurants that serve lunch and dinner in a monopolistically competitive market. Assume WataDine, as a typical restaurant in the city, is currently producing the profit-maximizing output level, and earns positive short-run economic profit. (a) How is monopolistic competition similar to each of the following market structures? (i) Perfect competition (ii) Monopoly (b) WataDine is currently earning short-run economic profits. Draw a correctly labeled graph for WataDine in short-run equilibrium and show each of the following. (i) The profit-maximizing quantity, labeled QM (ii) The profit-maximizing price, labeled PM (c) Given that WataDine is currently earning short-run economic profits, what will happen to each of the following in the long run? (i) WataDine's economic profit. Explain. (ii) WataDine's demand curve for its restaurant meals. (d) Assume WataDine is in long-run equilibrium. (i) Is WataDine taking advantage of its economies of scale? Explain.…
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Refer to the graphs. The long run outcome for a monopolistically competitive firm would be represented by graph: Quantity (A) MC MC Quantity (C) ATC D MR ATC D = MR 0 10 MC Quantity (B) MC Quantity (D) D MR D ATC ATC MR
In the short-run, a monopolistically competitive firm: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. b will produce at the point where marginal revenue is greater than marginal cost, in order to maximize profits. Your answer C can earn only a normal profit. d will produce at the point at which price equals minimum ATC, to maximize profits. will shut down temporarily if price is less than AVC.
Discuss the long-term effects in a monopolistically competitive market if an existing firm is making profits or losses. Use graphs to help your explanations.
DE Quantity MC MR ATC Demand The graph above represents a firm in a monopolistically competitive market. Which of the following is true? The firm's profit-maximizing quantity is E. The firm is making a profit of (A - B) x D. The firm is making zero economic profits. The firm is making a loss of (A - B) x D.
Price ($) Monopolistically Competitive Firm Output D MR MC SRATC G