Suppose Friedman Inc., a monopolistic competitor, sells sofas. They are able to sell 570 sofas at a price of $11 per unit. Their marginal costs are $6 and their costs per unit are $6. Calculate the total economic profits that Friedman Inc. earns: $
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- Calculate the profit-maximizing price and quantity for amonopolistically competitive firm in the short runSusan owns a restaurant that sells hamburgers in a monopolistically competitive market. The graph to the right depicts the demand and marginal revenue for her hamburgers. Suppose that Susan's restaurant is maximizing profits at 35 hamburgers (per day). Assume that the monopolistically competitive industry is at a long-run equilibrium. Use the three-point curve drawing tool to add Susan's long run average cost (ATC) curve to the graph. Properly label this curve. Carefully follow the instructions above, and only draw the required objects. ul Price and cost (dollars per hamburger) 2.00- 2.25- 2.00- 1.75 1.50- 1.25 1.00- 0.75- 0.50 0.25 0 MR 10 20 30 40 50 60 70 80 Quantity of hamburgers (per day) ATC D 90 100 a GBased on the picture, can you please answer this fast! The profit-maximizing firm illustrated in Figure 10-1 operates in a monopolistically competitive industry. What is this firm’s total profit equal to? options: FGAB OECD EFBC OFBD
- The diagram above represents a monopolistically competitive firm. Answer the questions below. Is this firm operating in the short-run or long-run? How do you know? Calculate this firm’s accounting profit. From the diagram, what is the productively efficient output for this firm? From the diagram, economies of scale are maximized at which output level? Explain. From the diagram, what is the allocatively efficient output for this firm? Explain.Explain how a price taker firm could use monopolistic competition to become a price searcher.The following graph represents a monopolistically competitive firm in long-run equilibrium. Place the black point (cross sign) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Next, place the grey star on the graph to indicate the point where the LRAC reaches a minimum. PRICE PER UNIT (Dollars) 500 450 400 350 300 250 200 150 100 50 MC 0 0 50 LRAC MR Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Units) Monopolistically Competitive Outcome Minimum of the LRAC The long-run equilibrium price is $ (Hint: Use the graph to find the numeric value of the price at equilibrium.) The long-run equilibrium quantity is units. The LRAC curve is at its minimum at a quantity of The long-run equilibrium price is units. the marginal cost of producing the equilibrium output. ?
- In the long run, the economic profits for a monopolistically competitive firm will beYou are a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. P = MC, P > ATCP > MC, P = ATC Illustrating with graph(s), can the firm possibly be maximising profit? If not, what should it do to increase profit? If the firm is profit-maximising, is the firm in a long-run equilibrium? If not, what will happen to restore long-run equilibrium? PLZ EXLAIN MORE DETAILS AND WRITE IT CLEARLY THX!!!In the above figure, the profit-maximizing output and price for this monopolistically competitive firm are
- encient? 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. 3; 100 50 90 80 88 + 70 70 60 550 40 PRICE (Dollars per razor) 30 30 10 MC 20 20 0 10 10 ATC +. ? Mon Comp Outcome MR Demand 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of razors) Min Unit CostBianca bakes delicious cookies. Her total fixed cost is $40 a day, and her average variable cost is $1 a bag. Few people know about Bianca’s Cookies, and she is maximizing her profit by selling 10 bags a day for $5 a bag. Bianca thinks that if she spends $50 a day on advertising, she can increase her market share and sell 25 bags a day for $5 a bag. Choose the best answer. Advertising will 1.(decrease/ increase/ not change) Bianca's 2.(variable cost/fixed cost) to produce the cookies. If Bianca advertises, in the short run, will she continue to sell her cookies for $5 a bag or will she change her price? 3. (will sell cookies at a lower price/ will sell cookies at a higher price/ will keep the price at $5 per bag)Firms compete in different types of market structures. In the real world, most markets are either monopolistically competitive or oligopolistic, and a few markets have a monopoly. Note that perfect competition is rare because no market has all the characteristics of a perfectly competitive market as described by the theory of perfect competition. Explain which firm is likely to face a more elastic demand curve: a monopoly or a pizza shop?
