In the long run, the representative firm in monopolistic competition tends to have: Select one: a. a perfectly elastic demand curve. b. economic profits. c. maximized consumer utility. d. limited product differentiation. e. excess capacity.
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In the long run, the representative firm in
Select one:
a. a perfectly
b. economic profits.
c. maximized consumer utility.
d. limited product differentiation.
e. excess capacity.
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- In the long run, the economic profits in a monopolistically competitive industry tend to go towards zero. The main reason for this is: a differentiated products. b diseconomies of scale. c increased regulatory pressure on profitable firms. d free entry.Which of the following is always associated with monopolistic competition? a. highly inelastic demand curves b. low barriers to entry c. demand curve that lies below the marginal revenue curve d. indistinguishable products e. economic profits in the long runIn the long run the demand curve that a monopolistic competitor faces for its product will likely: A. Intersect the ATC at its minimum point.B. Intersect the ATC curve somewhere past the minimum point.C. Become tangent to the ATC curve somewhere left of its minimum point.D. None of the above.
- A monopolistically competitive firm is operating in the short run at the optimal level of output and is earning negative economic profits. Which of the following must be true? Select one: a. ATC> P> MR = MC. b. ATC= P> MR = MC. c. ATC> P = MR = MC. d. ATC> P> MR > MC.Monopolistically competitive firms use product differentiation to a.limit the number of firms in the industry. b.ensure long-run profits. c.achieve market power. d.block other firms from entering the industry.Because monopolistically competitive firms produce differentiated products, they will: Select one: a. face a perfectly elastic demand curve. b. face a downward-sloping demand curve. c. be unable to create any degree of product loyalty. d. never need advertising.
- In the short-run, a monopolistically competitive firm: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. b will produce at the point where marginal revenue is greater than marginal cost, in order to maximize profits. Your answer C can earn only a normal profit. d will produce at the point at which price equals minimum ATC, to maximize profits. will shut down temporarily if price is less than AVC.Fresh Taste, Inc. produces organic breakfast cereals. The market for breakfast cereals is monopolistically competitive. The figure above shows the demand curve that Fresh Taste faces (D), the company's marginal revenue curve (MR), its marginal cost curve (MC), and its average total cost curve (ATC). Fresh Taste's excess capacity is a. 4,000 boxes per day. b. zero. c. 12,000 boxes per day. d. 8,000 boxes per day.Under perfect competition and monopolistic competition, profits are zero in long-run equilibrium.true or false
- Q8. The similarity between Monopoly and Monopolistic competition is vow a) Free entry and exit of firms marginal revenue b) Quality of product is same c) Price charged exceeds d) Demand curves are perfectly elastic. Q9. Which of the following conditions is acceptable as the last stage of production for a P.C. firm? a) Size of loss equals to total fixed cost b) Size of loss equals to total variable cost c) Size of loss equals to total cost d) Firm earns zero economic profit Q10 The monopolistic competitive firm produces product a) That is slightly differentiated b) That is significantly different from each other c) That is considerably different from each other d) That is of lower quality than the P.C. firmMacmillan Learning Increasing Returns to Scale and Monopolistic Competition Starting from the long-run trade equilibrium in the monopolistic competition model, as illustrated in the accompanying figure, consider what happens when industry demand D increases. For instance, suppose that this is the market for cars, and lower gasoline prices generate higher demand D. a. Show the resulting shift in the D/NT, d, and mr curves. Assume the price increases to $13. Place point A on the new short-run equilibrium. Price 09876 20 19 18 17 16 15 11 10 9 8 7 6 5 4 3 2 1 0 mr D/NT d A • AC MC 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 QuantityThe graph below summarizes the demand and costs for a firm that operates in a monopolistically competitive market.Instruction: Use the nearest whole numbers on the graph when calculating numerical responses below.a. What is the firm’s optimal output? unitsb. What is the firm’s optimal price?$ c. What are the firm’s maximum profits?$ d. What adjustments should the manager be anticipating?multiple choice Demand will decrease over time as new firms enter the market. Demand will increase over time as firms exit the market. Demand will remain unchanged over time.
