MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
11th Edition
ISBN: 9781264207718
Author: Colander
Publisher: MCG CUSTOM
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Chapter 14, Problem 17QE
To determine
The effect of the first mover advantage on platform
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3. Is monopolistic competition efficient?
Suppose that a firm produces baseball bats in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue
(MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve.
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.
PRICE (Dollars par bat)
80
70
60
20
MO
о
о 10 20
40
ATC
60
QUANTITY (Thousands of bas)
Demand
Man Camp Outcome
Min Unit Cost
Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that
optimal quantity. Furthermore, the quantity the firm produces in long-run equilibrium is
average total cost.
at the
the quantity at which…
K
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.
What is the firm's profit-maximizing price and quantity?
thousand
per bottle. (Enter your
The monopolistically competitive firm's profit-maximizing quantity is
bottles of shampoo, and its profit-maximizing price is $
responses as integers.)
Price and cost (per bottle)
♫
3.00-
MC
2.80-
ATC
2.60-
2.40-
2.20-
2.00-
1.80-
1.60-
1.40-
1.20-
1.00-
0.80-
0.60-
0.40-
0.20-
0.00+
0
MR
2 4 6 8 10 12 14 16 18 20 22 24
Quantity (shampoo bottles in thousands)
In which type of market, monopolistic or competitive market, is the equilibrium market price lower? Why?
Chapter 14 Solutions
MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
Ch. 14.1 - Prob. 1QCh. 14.1 - Prob. 2QCh. 14.1 - Prob. 3QCh. 14.1 - Prob. 4QCh. 14.1 - Prob. 5QCh. 14.1 - Prob. 6QCh. 14.1 - Prob. 7QCh. 14.1 - Prob. 8QCh. 14.1 - Prob. 9QCh. 14.1 - Prob. 10Q
Ch. 14.A - Prob. 1QECh. 14.A - Prob. 2QECh. 14.A - Prob. 3QECh. 14.A - Prob. 4QECh. 14 - Prob. 1QECh. 14 - Prob. 2QECh. 14 - Prob. 3QECh. 14 - Prob. 4QECh. 14 - Prob. 5QECh. 14 - Prob. 6QECh. 14 - Prob. 7QECh. 14 - Prob. 8QECh. 14 - Prob. 9QECh. 14 - Prob. 10QECh. 14 - Prob. 11QECh. 14 - Prob. 12QECh. 14 - Prob. 13QECh. 14 - Prob. 14QECh. 14 - Prob. 15QECh. 14 - Prob. 16QECh. 14 - Prob. 17QECh. 14 - Prob. 18QECh. 14 - Prob. 19QECh. 14 - Prob. 20QECh. 14 - Prob. 21QECh. 14 - Prob. 22QECh. 14 - Prob. 23QECh. 14 - Prob. 24QECh. 14 - Prob. 25QECh. 14 - Prob. 1QAPCh. 14 - Prob. 2QAPCh. 14 - Prob. 3QAPCh. 14 - Prob. 4QAPCh. 14 - Prob. 5QAPCh. 14 - Prob. 6QAPCh. 14 - Prob. 7QAPCh. 14 - Prob. 1IPCh. 14 - Prob. 2IPCh. 14 - Prob. 3IPCh. 14 - Prob. 4IPCh. 14 - Prob. 5IPCh. 14 - Prob. 6IPCh. 14 - Prob. 7IPCh. 14 - Prob. 8IPCh. 14 - Prob. 9IP
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