Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Question

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Answer 1

Question

Chapter 25, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

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Students have asked these similar questions

At the 8:10 café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (that is she cannot price discriminate). Students with early classes Students without early classes Coffee 70 60 Banana 50 100 The MC of coffee is 10. The MC of a banana is 40. Is bundling more profitable than selling separately? HINT: if you sell the bundle, can you make more by offering coffee separately? If so, what price should be charged for the bundle? (Show calculations)

Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000. Use the following demand data: Group Value Frequency Baby boomers $5 20% Generation X $4 10% Generation Y $3 10% `Tweeners $2 10% Seniors $2 10% Others $0 40%

Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000. Group Value Frequency Baby boomers $5 20% Generation X $4 10% Generation Y $3 10% `Tweeners $2 10% Seniors $2 10% Others $0 40% ur marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.

Answer 2

Question

Chapter 25, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

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!

Answer 3

Question

Chapter 25, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

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!

Answer 4

Question

Chapter 25, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

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!

Answer 5

Chapter 25, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

Answer 6

Chapter 25, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

Answer 7

Chapter 25, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Answer 8

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Economics (Book Only), Chapter 25, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.