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 90 80 80 PRICE (Dollars per razor) 30 30 40 40 50 660 70 70 220 20 10 MC ATC MR Demand 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of razors) 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 the efficient scale. firm. Further, the quantity the firm produces in long-run equilibrium is True or False: This indicates that there is a markup on marginal cost in the market for razors. True False at the optimal quantity for each Monopolistically competitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of externality implies that there is too much entry of new firms in the market. the
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 90 80 80 PRICE (Dollars per razor) 30 30 40 40 50 660 70 70 220 20 10 MC ATC MR Demand 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of razors) 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 the efficient scale. firm. Further, the quantity the firm produces in long-run equilibrium is True or False: This indicates that there is a markup on marginal cost in the market for razors. True False at the optimal quantity for each Monopolistically competitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of externality implies that there is too much entry of new firms in the market. the
Chapter14: Monopolistic Competition And Product Differentiation
Section: Chapter Questions
Problem 5P
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Transcribed Image Text: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
90
80
80
PRICE (Dollars per razor)
30
30
40
40
50
660
70
70
220
20
10
MC
ATC
MR
Demand
0
0
10
20
30 40 50
60 70
80
90 100
QUANTITY (Thousands of razors)
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
the efficient scale.
firm. Further, the quantity the firm produces in long-run equilibrium is
True or False: This indicates that there is a markup on marginal cost in the market for razors.
True
False
at the optimal quantity for each
Monopolistically competitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of
externality implies that there is too much entry of new firms in the market.
the
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