Pearson eText Microeconomics -- Instant Access (Pearson+)
Pearson eText Microeconomics -- Instant Access (Pearson+)
13th Edition
ISBN: 9780136879510
Author: Michael Parkin
Publisher: PEARSON+
bartleby

Concept explainers

Question
Book Icon
Chapter 14, Problem 1SPA
To determine

Identify the items which are sold by the firms in monopolistic competition.

Expert Solution & Answer
Check Mark

Explanation of Solution

Monopolistic competition is an imperfect market situation, wherein, many sellers produce differentiated products. Hence, the products have not perfect substitutes.

In the cable television service market, there are less number of firms and the service provided by these firms are mostly homogenous. Thus, it cannot be considered as monopolistic competition.

The wheat market is selling homogenous goods (Wheat). Thus, it is not a monopolistic competition.

Differentiated goods exist in the shoe industry. Shoes differ in the quality, quality, shape and features. Thus, these good are sold in a monopolistic competitive market.

Since there is less number of firms existing in the soda market, it cannot be considered to be under monopolistic competition.

A lot number of firms produce different types of tooth brushes. Since these are differentiated goods, these good are sold in the monopolistic market.

Ready mix concrete is a homogenous good. Thus, it is not a monopolistic competitive.

In short, out of the given items, only items in the shoe market and toothbrush industry are considered examples under monopolistic competition.

Economics Concept Introduction

Monopolistic competition: Monopolistic competition is an imperfect market structure which has a relatively large number of buyers and sellers in the market, differentiated products, some control over the market price and a few barriers of entry and exit.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
not use ai please
1. Lisa has $48 per week set aside for coffees (x) and lunches (z). The price of coffee is $4 and lunches are $6. What is Lisa's budget line equation (with z on the left-hand side)? Graph the budget line, and show how it changes when the price of lunches rise to $8 (including intercepts). What is the new budget line equation? 2. Suppose utility for a consumer of movies (x) and golf (z) is U = 20x0.420.5. The consumer has set aside $1000 to consumer movies and golf for a year. a. If the price of movies is $20 and the price of golf is $40, what is the utility-maximizing consumption of movies and golf? b. Show the optimal consumption bundle on a graph, showing a budget line (with intercepts), a tangent indifference curve, and the optimal choice. 3. Sam has set aside $480 for entertainment this month, which is golf (x) and/or bowling (z). A round of golf is $40 and a night of bowling is $30. His utility function is U = 3x + 2z. a. What is his MRS? b. Solve for the optimal choice of golf…
Question Seven There are specific applications of the hidden-action or moral hazard model. Consider employment contracts signed between a firm's owners and a manager who runs the firm on behalf of the owners. The manager is offered an employment contract which they can accept and decide how much effort, e ≥ 0, to exert. Suppose that an increase in effort, e, increases the firm's gross profit, not including payments to the manager, but is personally costly to the manager and the firm's gross profit, Пg, takes the following form: Пg = e +ε, ε~N(0,2). Let s denote the salary, which may depend on effort and/or gross profit, depending on what the owner can observe, offered as part of the contract between the owner and manager. Suppose that the manager is risk averse and has a utility function with respect to salary of the form: Aσ² U(W)=μ- 2 a) Derive the optimal result of the owner's expected net profit where there is full information and state what it implies. b) Suppose now that the…
Knowledge Booster
Background pattern image
Economics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics
Economics
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Microeconomics A Contemporary Intro
Economics
ISBN:9781285635101
Author:MCEACHERN
Publisher:Cengage