In the long run, firms in a monopolistically competitive market will earn __________ profits. Question 20Answer a. Zero b. Negative c. Positive d. Unknown
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In the long run, firms in a
Question 20Answer
Zero
Negative
Positive
Unknown
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- Exercise A.8. The graph below corresponds to a company operating in a market under conditions of monopolistic competition: € 5 4 3 2 1 CM CMe 20 40 60 90 100 120 Quantity of output a) What is the level of production maximizes the short-term profits of this company? b) What price will the company charge to maximize its profits? c) What benefits does the company obtain in the short term? d) How would advertising affect the curves shown in the graph? Would profits necessarily increase? Reason your answers.The 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.A monopolistically competitive firm faces the following demand and cost structure in the short run: Output Price FC VC TC TR Profit/Loss 0 $100 $100 $ 0 ____ ____ ________ 1 90 ____ 50 ____ ____ ________ 2 80 ____ 90 ____ ____ ________ 3 70 ____ 150 ____ ____ ________ 4 60 ____ 230 ____ ____ ________ 5 50 ____ 330 ____…
- The information below provides conditions faced by a monopolistically competitive firm. Price and costs $70 $65 $60 $55 $50 $45 $40 $40 $35 $30 $25 $250 $20455 $15 $10 $5 0 $32.50 MIR Quantity MC ATC Demand Use the information above to answer the following question. This monopolistically competitive firm's economic profit/loss is $.Suppose new firms enter a monopolistically competitive market. What is the effect of new firms entering the market from the perspective of the firms that were already in the market? Question 11Answer a. Positive supply shock b. Positive demand shock c. No effect d. Negative supply shock e. Negative demand shockPrice, cost, revenue $100 $90 $80 $70 $60 $50 0 000 MR MC D /AC 0 7000 14000 21000 12000 Dresses per year Refer to the graph shown of a monopolistically competitive firm. In the long run: marginal cost will fall for firms that remain as other firms exit the industry. demand will fall for firms that remain as other firms enter the industry. Odemand will rise for firms that remain as other firms exit the industry. O average total cost will rise for firms that remain as other firms enter the industry.
- How do the results of a competitive industry compare with that of a monopolistic industry?The figure shows the situation facing Smart Digit, Inc., a firm in monopolistic competition that produces calculators. What is the firm's profit-maximizing price? OA. $10 B. $4 OC. $8 OD. $12Westchesser Gloves is a monopolistically competitive firm that sells leather gloves. Use the graph to highlight the area of profit or loss and answer the questions, Price per pair (5) 10 20 Marginal profit or loss: $ Aver co Pairs of gloves (in thousand) Demand 70 80 90 100 Profit or loss Calculate Westchesser's profit or loss at the profit-maximizing price. What will happen to the number of firms in this industry in the long run? Firms will enter this industry, increasing the price at which each firm can sell their gloves until firms begin to earn normal profits. O Firms will exit this industry, increasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will exit this industry, decreasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will enter this industry, decreasing the price at which each firm can sell their gloves until firma begin to carn normal profits
- Exercise A.13. Explain and graph the long-run equilibrium of a monopolistic firm and that of a perfectly competitive firm. Compare both situations in terms of the level of production, prices and economic efficiency.[1] A. B. C. D. Which of the following predicts that, within a range, prices will not respond to cost changes? Producer Surplus Monopolistic Competition Kinked Demand Curve None of the aboveThe graph to the right depicts the demand for caffe lattes at a local coffeehouse along with the average total cost and marginal cost of producing lattes. Suppose the coffeehouse is in a monopolistically competitive market in the short run. How many caffe lattes should this coffeehouse produce to maximize profits? units. (Enter a numeric MC response using an integer.) 1.60... 1.45. ATC What is the corresponding profit-maximizing price? per latte. (Enter a numeric response using a real number rounded to two decimal places.) 1.21.. Calculate the coffeehouse's profits on caffe lattes. $ number rounded to two decimal places.) (Enter a numeric response using a real 1.00 MR D 40 100 Quantity of caffe lattes (per day) ... Price and cost (dollars per cup)