Which of the following statements is true?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.bСdMonopolistic competitive firms that earn economic profits in the short run commonly will find their profits competedaway in the long run.Monopolistic competitive firms will earn economic profits in the long run because of their ability to control the price ofthe product.Monopolistic competitive firms will earn zero economic profits in both the short and the long run.Monopolistic competitive firms must earn economic profits in the long run, or they will shut down.

Monopolistic competition refers to a market structure where large numbers of firms dominate the…

Answered: Which of the following statements is…

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 diagram above represents a monopolistically competitive firm. Answer the questions below. Is this firm operating in the short-run or long-run? How do you know? Calculate this firm’s accounting profit. From the diagram, what is the productively efficient output for this firm? From the diagram, economies of scale are maximized at which output level? Explain. From the diagram, what is the allocatively efficient output for this firm? Explain.
Suppose that a company operates in the monopolistically competitive market for denim jackets. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. 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. ? 100 PRICE (Dollars per jacket) 8 20 60 50 X ATC 20 MC MR 2 2 2 2 10 0 0 30 40 50 60 70 QUANTITY (Thousands of jackets) 10 20 80 Demand 90 100 Mon Comp Outcome Min Unit Cost
The following graph represents a monopolistically competitive firm in long-run equilibrium. Place the black point (cross sign) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Next, place the grey star on the graph to indicate the point where the LRAC reaches a minimum. PRICE PER UNIT (Dollars) 500 450 400 350 300 250 200 150 100 50 MC 0 0 50 LRAC MR Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Units) Monopolistically Competitive Outcome Minimum of the LRAC The long-run equilibrium price is $ (Hint: Use the graph to find the numeric value of the price at equilibrium.) The long-run equilibrium quantity is units. The LRAC curve is at its minimum at a quantity of The long-run equilibrium price is units. the marginal cost of producing the equilibrium output. ?
The diagram below describes a monopolistically competitive firm in long-run equilibrium. On the diagram illustrate. a. The quantity of output, qo , that maximizes profit. b. The quantity of output, qfe , that would represent the firm’s full capacity. c. The quantity of output, qs , that would represent the socially optimal output level.
The accompanying graph depicts average total cost (ATC), marginal cost (MC), marginal revenue (M), and demand (D) facing a monopolistically competitive firm. 50 MC Place point A at the firm's profit maximizing price and 45 quantity. 40 What is the firm's total cost? 35 30 ATC 25 total cost: $ 20 D 15 10 What is the firm's total revenue? MR 05 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity total revenue: $ What is the firm's total profit? profit: $ Price and Cost ($)
Which of the following statements is true about the difference between monopoly and monopolistic competition? a.Monopolies always earn positive profits b.Monopolistically competitive firms have no barriers to entry or exit
Assume a monopolistically competitive firm encounters a decrease in average variable cost at all output levels.We would expect: a. The price to rise and output to rise b. The price to fall and output to fall c. The price to rise and output to fall d. The price to fall and output to rise
Suppose the accompanying graph depicts a monopolistically competitive firm earning positive economic profits. Please shift the curves to show the effects of long-run competition and then place Point A at the price and quantity at which the firm will produce in the long-run.
Suppose you manage a firm in a monopolistically competitive market Suppose you manage a firm in a monopolistically competitive market. Which of the following strategies will do a better job of helping you maintain economic profits: obtaining a celebrity endorsement for your product or supporting the entry of firms that will compete directly with your biggest rival? Explain your answer. Suppose you manage a firm in a monopolistically competitive market
What are the “monopolistic” and the “competitive” elements of monopolistic competition?Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box.Similar to a monopoly, a monopolistic competitor: can restrict output to increase price (at least in the short run).checked can make profits or losses in the short run.unanswered faces a downward-sloping demand curve.unanswered faces high barriers to entry.unanswered makes economic profits in the long run.unanswered produces where P > MR = MC.unanswered has one seller.unanswered Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box.Similar to a perfect competitor, a monopolistic competitor: faces a perfectly elastic demand…
Suppose the figure to the right represents the market for a particular brand of shampoo, such as L'Oreal, Lancome, or Maybelline. Assume the market is monopolistically competitive and is in long-run equilibrium. How much excess capacity does the firm have? The monopolistically competitive firm's excess capacity is thousand bottles of shampoo. (Enter your response as an integer.) C Price and cost (per bottle) 2.00- Q 1.80- MC Q ATC 1.60- 1.40- 1.20- 1.00- 0.80- 0.60- 0.40- 0.20- 0.00+ 0 2 MR D 4 6 8 10 12 14 16 18 20 Quantity (shampoo bottles in thousands)
Consider the market of monopolistic competition. Which of the following options is correct in the long run? 500 300 ATC 250 X 200 150 MC MR 150 PRICE (Dollars per scooter) 450 400 350 100 50 0 0 50 100 Demand 200 250 300 350 400 450 QUANTITY (Scooters) 500 Few firms will enter, and few will exit in the long run. More firms will enter the industry in the long run. Neither firm will enter nor exit in the long run. More firms will exit from the industry in the long run.

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