Which of the following statements concerning profit-maximizing firms in long-run equilibrium is true? In a purely competitive market, firms produce a level of output where price is greater than average total cost. In a purely competitive market, firms produce a level of output where price is greater than marginal cost. O In a monopolistically competitive market, firms produce a level of output at which price exceeds the minimum average total cost. In a monopolistically competitive market, firms produce a level of output that exceeds the output where average total cost is minimized.

Which of the following statements concerning profit-maximizing firms in long-run equilibrium is true? In a purely competitive market, firms produce a level of output where price is greater than average total cost. In a purely competitive market, firms produce a level of output where price is greater than marginal cost. O In a monopolistically competitive market, firms produce a level of output at which price exceeds the minimum average total cost. In a monopolistically competitive market, firms produce a level of output that exceeds the output where average total cost is minimized.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 4QFR

See similar textbooks

Similar questions

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. 100 90 Mon Comp Outcome 80 70 60 Min Unit Cost 50 ATC 40 30 20 10 MC MR Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of bats) PRICE (Dollars per bat)
Suppose that a company operates in the monopolistically competitive market for electric razors. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. 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 per razor) 100 90 8 70 60 50 40 30 20 10 0 D MO 10 ATC MR 20 30 40 50 60 70 QUANTITY (Thousands of razors) 60 Demand 90 100 Mon Comp Outcome Min Unit Cost
Suppose that a firm produces wool jackets 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 perjacket) 100 90 80 70 60 50 40 30 20 10 0 0 MC 10 ATC MR 20 30 40 50 80 70 QUANTITY (Thousands of jackets) 80 Demand 90 100 O F ++ Mon Comp Outcome Min Unit Cost hp e
7. Is monopolistic competition efficient? Suppose that a company operates in the monopolistically competitive market for rugby kits. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. 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 (Dolars per 3822ESRR 2 100 70 20 0 MO 6 19 20 ATC MR 30 AS 50 40 70 QUANTITY (Thousands of kits); Demand 8 100 Mon Comp Outcome Min Unit Cost C
If the firms in a monopolistically competitive market are earning economic profits in the short run, would you expect them to continue doing so in the long run? ● They will be unable to earn economic profits in the long run O They will always be able to earn economic profits in the long run. O They can continue to do so in the long run if new entries cannot completely erase the differentiation in their product. O Monopolisitc companies cannot earn economic profits in the long run unless government regulations help them achieve their goal of economic profits.
Submit All stion 17 of 30 Which statement best explains why consumers might benefit more from monopolistic competition than perfect competition? O The demand curve for a monopolistically competitive firm follows the law of demand, but the demand curve for a perfectly competitive firm does not. O Monopolistic competitors will use fewer resources per unit of output than perfect competitors, so overall output will be maximized. O The benefits of having more variety offsets the losses from productive and allocative inefficiencies. The balance between marginal cost and price in monopolistic competition ensures that the optimal level of output will be produced. 8: 46°F > 节 a
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 (Dolars per kit) 100 8 80 70 50 8 10 0 MO 10 ATC 20 30 O True O False MR 60 70 QUANTITY (Thousands of kits) Demand 40 80 90 100 Mon Comp Outcome Min Unit Cost Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that firm. Further, a monopolistically competitive firm's average total cost in long-run equilibrium is True or False: This indicates that there is excess capacity in the market for kits. at the optimal quantity for each the minimum average total cost.
The most important factor that drives the long-run profit to zero in monopolistic competition is the elasticity of the market demand curve the elasticity of the firm's demand curve free entry and exit O the reaction of rival firms to a change in price What is one difference between the Cournot and Stackelberg models? O In Cournot, both firms make price decisions simultaneously, and in Stackelberg, one firm sets its price level first O In Stackelberg, both firms make price decisions simultaneously, and in Cournot, one firm sets its price level first O In Cournot, both firms make output decisions simultaneously, and in Stackelberg, one firm sets its output level first O In Stackelberg, both firms make output decisions simultaneously, and in Cournot, one firm sets its output level first O Profits are zero in Cournot and positive in Stackelberg
The figure above shows a monopolistically competitive firm in the short run. During the transition to the long run, the demand and marginal revenue curves will shift and both become 5 MC 4 ATC 1 MR 20 40 60 80 100 120 Quantity (units per day) O A. leftward; more elastic OB. leftward; less elastic OC. rightward; more elastic OD. rightward; less elastic 3. 2. Price and costs (dollars per unit)
PRICE (Dollars per engine) 100 90 80 70 60 40 30 & 2 20 10 MO D 0 10 ATC MR Demand 20 30 40 50 60 70 DO 90 QUANTITY (Thousands of engines) 100 Mon Comp 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, a monopolistically competitive firm's average total cost in long-run equilibrium is average total cost. at the the minimum
at the Because this market is a monopolistically competitive market, you can tell that it is in long-run equihbrium by the fact that the efficient scale. optimal quantity for each firm. Furthermore, the quantity the firm produces n long-run equilibrium is True or False: This indicates that there is a markup on marginal cost in the market for jackets. OTrue False
QUESTION 26 Price MC 160 140 ATC 123.33 Demand 90 56.67 MR 100 133.33 154.92 Quantity The figure is drawn for a monopolistically-competitive firm. In response to the situation in this graph, we would expect O a. many new firms to enter this market O b. this firm to gain positive profit in the long run O c. this firm's profit to move from its current value toward zero in the long run O d. All of the above are correct