Why is the firm's demand curve flatter than the total market demand curve in monopolistic competition? Suppose a monopolistically competitive company makes short-term profits. What will happen to your long-term demand curve? Represent graphically
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Exercise 5.2 Why is the firm's demand curve flatter than the total market demand curve in
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- Exercise 5.5 In this unit we have seen that monopolistically competitive firms could increase the amount they produce and reduce the ATC of production. Why don't they?Exercise 5.1 Describe with the help of graphs the long-term equilibrium of a monopolistically competitive market. What is the relationship between price and ATC? And between the price and the MC?Exercise 6.2. If the companies that make up a duopoly agreed on the amount they are most interested in offering to the market, what amount would they choose? Why? If, on the other hand, each of the companies acted on its own, would they produce between the two a greater or lesser amount than in the previous situation? Graphically represent and explain your answers.
- FRONT PAGE Pricing Disney+ Disney decided it wanted to provide streaming services directly to customers, rather than renting its library of films and television shows to other streaming services like Netflix. But how successful would a streaming service be? In other words, what did the demand for a "Disney+" streaming service look like? Disney knew that the number of subscribers would depend not just on the attractiveness of the Disney archives, but also on the subscription price. After doing some market research, Disney decided to launch Disney+ at a price of $6.99 a month (or $69.99 per year). When Disney+ was launched on November 12, 2019, 10 million people signed up on the first day-a resounding success! Source: News reports, October-December 2019. Suppose Disney+ changes its monthly subscription price from $7 to $9 per month. Graphically show the impact of this price change in the following markets: a. Popcorn, pizza, and other movie snacksWhat can be used to influence and shape consumers’ intangible preferences in order to differentiate products within a monopolistically competitive market? Group of answer choices pricing strategy product placement advertisingThere are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products. What would the market for wheat be considered? Question 15 options: monopolistic perfectly competitive monopolistically competitive oligopolistic
- Exercise A.6. Do monopolistically competitive markets normally have the optimal number of products?draw a profit-maximizing monopolistically competitive firm earning zero economic profits. then show what happens if 100 more firms were added to this industry.Economics You are a manager of a monopolistically competitive firm that is currently charging a price of $5 for its product and, at this price you are selling 52,000 units of your product. At this price and quantity combination, you have estimated your own price elasticity of demand to be -2.0 and you have an advertising elasticity of 0.25. What is the optimal amount for you to spend on advertising?
- Monopolistic competition creates inefficiency because of the Price markups and excess capacity. The graph depicts the situation $100 for a hypothetical monopolistically competitive firm. The 90 curves included in the graph are demand (D), marginal 80 revenue (MR), average total cost (ATC), and marginal cost ATC (MC). Use the graph to find the requested values. 70 60 What is the size of the markup on the price? 50 40 markup: $ 30 What is the size of the excess capacity? 20 MC MR 10 units excess capacity: 20 30 40 50 60 70 80 90 10 100 QuantityExercise A.8. The graph below corresponds to a company operating in a market under conditions of monopolistic competition: € 5 4 3 2 1 CM CMe 20 40 60 90 100 120 Quantity of output a) What is the level of production maximizes the short-term profits of this company? b) What price will the company charge to maximize its profits? c) What benefits does the company obtain in the short term? d) How would advertising affect the curves shown in the graph? Would profits necessarily increase? Reason your answers.Westchesser Gloves is a monopolistically competitive firm that sells leather gloves. Use the graph to highlight the area of profit or loss and answer the questions, Price per pair (5) 10 20 Marginal profit or loss: $ Aver co Pairs of gloves (in thousand) Demand 70 80 90 100 Profit or loss Calculate Westchesser's profit or loss at the profit-maximizing price. What will happen to the number of firms in this industry in the long run? Firms will enter this industry, increasing the price at which each firm can sell their gloves until firms begin to earn normal profits. O Firms will exit this industry, increasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will exit this industry, decreasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will enter this industry, decreasing the price at which each firm can sell their gloves until firma begin to carn normal profits
