What happens in the long run in monopoly and monopolistic competition?Barriers to entry allow sustained economic profits in a monopoly.Both types of markets have a long run equilibrium with zero economic profit.Barriers to entry allow sustained economic profits in monopolistic competition.Barriers to entry allow sustained economic profits in both types of markets. If market X was deemed to be an oligopoly, then what must be true?O The price is between the monopoly price and the competitive price.O The price is set at the market equilibrium.Price is set equal to marginal cost.Price equals ATC in long run equilibrium.

Monopoly is a form of imperfect competition. There is one firm. The number of consumers is high.…

Answered: What happens in the long run in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A market where there are only a few sellers is known as: monopolistic. oligopolistic. monopolistically competitive. cartelized. perfectly competitive.
A firm operating in monopolistic competition is maximizing its profit and earning negative economic profits. Which of the following must be true of its production? The price is equal to average total cost at the quantity where marginal revenue equals marginal cost. The price is less than average total cost at the quantity where marginal revenue equals marginal cost. The price is equal to average total cost, and marginal revenue is less than marginal cost. The price is greater than average total cost at the quantity where marginal revenue is equal to marginal cost. The price is greater than average total cost at the quantity where marginal revenue is less than marginal cost.
In the monopolistically competitive market, we expect the firms to avoid changing the price because of the uncertainty regarding how the competitors will behave. True False
In a monopolistically competitive industry with zero profits, each firm will produce less than the amount that minimizes average costs. True False
A monopolistic competitor has the following information about cost and demand. Quantity Price ($) Total Revenue ($) Marginal Revenue ($) Total Cost ($) Marginal Cost ($) Average Cost($) 0 15 0 15 175 — — 5 14 70 13 180 1 36 10 13 130 11 190 2 19 15 12 180 9 207 3.4 13.8 20 11 220 7 225 3.6 11.25 25 10 250 5 250 5 10 30 9 270 3 290 8 9.67 35 8 280 1 335 9 9.57 40 7 280 -1 385 10 9.63 45 6 270 -3 465 16 10.33 50 5 250 -5 565 20 11.3 What will this firm’s profits equal in the long run?
Explain fully why perfectly competitive firms and monopolies maximize profits by choosing the quantity where MR = MC. Explain why the profit maximizing price of the monopoly can be higher or lower than the profit maximizing price for perfect competition.
How short-run profit or losses induce entry or exit Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). 2. How short-run profit or losses induce entry or exit Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). 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 500 400 350 300 ATC 250 * 200 150 100 MO MR 450 50 30 PRICE (Dollars per l 0 Demand A 0 50 100 150 200 250 300 350 400 450 500 QUANTITY…
Few firms in the United States are monopolies because A) few firms experience economies of scale. B) of antitrust laws. C) when a firm earns profits, other firms will enter its market. D) most products that firms produce have substitutes.
A perfectly competitive firm is expected to make a $0 economic profit in the long-run. What type(s) of profit would you expect a monopolist to earn in the long-run? Why the difference? Use the editor to format your answer
Firms under monopolistic competition earn zero profit because a) There is not enough demand. b) There is free entry and exit. c) Each firm faces a downward sloping demand curve. d) In equilibrium, marginal revenue equals marginal cost
Is monopolistic competition efficient and socially desirable for the welfare of the economy
What does it mean in a monopolistically competitive market, when the rule for maximizing profit is to set MR = MC? Group of answer choices Price is equal to marginal revenue. Price is equal to marginal cost. Price is lower than marginal revenue. Price is higher than marginal revenue.

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS