MICROECONOMICS-ACCESS CARD <CUSTOM>
11th Edition
ISBN: 9781266285097
Author: Colander
Publisher: MCG CUSTOM
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Question
Chapter 14, Problem 22QE
To determine
The obstacles to earn economic profit by a monopolistic competitor.
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Consider the weekly market for gyros in a popularneighborhood close to campus. Suppose this market is operating in long-run competitive
equilibrium with many gyro vendors in the neighborhood, each offering basically the same gyros. Due to the structure of the market, the vendors act
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The following graph displays the supply (SMC) and demand (D) curves in the weekly market for gyros.
Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition.
(?)
(0)
50
45
PRICE (Dollars per gro)
4.0
3.5
30
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15
1.0
D
3.5
30
25
Now assume that one of the gyro vendors successfully petitions the neighborhood development board to obcain exclusive rights to sell gyros in the
neighborhood. This firm buys up all the rest of the gyro food trucks in the area and begins to operate as a monopoly. Assume that this change does
not affect demand and that the marginal cost curve of the new…
pic 1 :
A small town is served by many competing supermarkets, which all have the same constant marginal cost.
Use the black point (plus symbol) to show the competitive price and quantity in this market. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus.
pic 2 :
Now suppose that the independent supermarkets combine into one chain.
Use the black point (plus symbol) to show the profit-maximizing monopoly outcome. Then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. Finally, use the black area (plus symbol) to shade the area representing deadweight loss.
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plot the short-run industry supply curve when there are 20 firms.
PRICE (Dollars per pound)
100
90
80
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50
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0
0
125 250 375 500 825 750 875 1000 1125 1250
QUANTITY (Thousands of pounds)
Demand
Because you know that competitive firms earn
Supply (10 firms)
True
Supply (15 firms)
If there were 10 firms in this market, the short-run equilibrium price of rhodium would be $
would
. Therefore, in the long run, firms would
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Supply (20 firms)
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?
per pound. At that price,…
Chapter 14 Solutions
MICROECONOMICS-ACCESS CARD <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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