9. Perfect Competition The market for peanut butter in Nutville is monopolistically competitive and in long-run equilibrium. The following graph shows the marginal-cost (MC) curve and the average-total-cost (ATC) curve for a peanut-butter-producing firm. It also shows the demand curve and marginal-revenue (MR) curve faced by a firm operating in a monopolistically competitive environment. On the following graph, use the black paint (plus symbol) to show the profit-maximizing output and price for a typical firm operating in a monopolistically competitive environment. Price, Cost, Revenue Demand ATC X MK Quantity Marginal cost remains unchanged. The quantity increases ++ One day, consumer advocate Skippy lif discovers that all brands of peanut butter in Nutville are identical. Thereafter, the market becomes perfectly competitive and again reaches its long-run equilibrium. Average total cost decreases. Profe decreases ProMaxx Under MC On the previous graph, use the gray paint (star symbol) to show the market price in this case and the quantity produced by each firm. Which of the following statements are true for a typical firm in this market given the transition from monopolistic competition to perfect competition? Check all that apply. The price remains unchanged. harlect Camp, Culனால
9. Perfect Competition The market for peanut butter in Nutville is monopolistically competitive and in long-run equilibrium. The following graph shows the marginal-cost (MC) curve and the average-total-cost (ATC) curve for a peanut-butter-producing firm. It also shows the demand curve and marginal-revenue (MR) curve faced by a firm operating in a monopolistically competitive environment. On the following graph, use the black paint (plus symbol) to show the profit-maximizing output and price for a typical firm operating in a monopolistically competitive environment. Price, Cost, Revenue Demand ATC X MK Quantity Marginal cost remains unchanged. The quantity increases ++ One day, consumer advocate Skippy lif discovers that all brands of peanut butter in Nutville are identical. Thereafter, the market becomes perfectly competitive and again reaches its long-run equilibrium. Average total cost decreases. Profe decreases ProMaxx Under MC On the previous graph, use the gray paint (star symbol) to show the market price in this case and the quantity produced by each firm. Which of the following statements are true for a typical firm in this market given the transition from monopolistic competition to perfect competition? Check all that apply. The price remains unchanged. harlect Camp, Culனால
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: Monopolistic Competition
Section: Chapter Questions
Problem 8PA
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