р P4 P3- P₂+ PI + - - MR QI [[[[२८]] Q3 The monopolistically competitive firm in the figure above MC ATC charges a lower price and produces more output than would a perfectly competitive firm. charges a price premium of P4-P3 and has excess capacity of Q3-Q1 when compared to perfect competition. can earn positive economic profits in the long run. produces output at the firm's efficient scale None of the above is true.
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- The figure below depicts a monopolistically competitive firm operating in the short run. Label the diagram with the items listed to the right of the figure. You will have to decide whether the firm is making a profit or a loss. Profit Price 8 25 OF 50 QUESTIONS COMPLETED -> At ед MR MC Quantity D ATC C Loss Average total cost Profit- maximizing price Profit- maximizing output SUBMIT ANSWEare 13-7 sis and evenue $4 P2 MC FM/ ATC E OG AS SS AVC (oo) ubonq aviimoo loiteiloqo sol o bnal Po Demand MA Quantity ure 13-7 shows short-run cost and demand curves for a monopolistically competitive firm in the footwear market. 3) Refer to Figure 13-7. Which of the following statements describes the best course of action for the firm depicted in the diagram? * A) The firm should minimize its losses by producing Qy units and charging a price of P1. B) The firm should minimize its losses by producing Qy units and charging a price of P2. C) The firm should minimize its losses by producing Qy units and charging a price of Po. D) The firm should exit the industry because its price is less than its average total cost. 3) A 4) Refer to Figure 13-7. Which of the following is the area that represents the profit or loss experienced by the firm? A) A loss represented by the rectangle PivwPo. B) An accounting profit equal to P1vwPo. C)A loss represented by the rectangle P2uvP1. D) A loss…Why demand curve in monopolistic competition market is downward sloping?) For the toolbar, press ALT+F10 (PC) or ALT+FN+F1O (Mac). Paragranh Arial 10
- Why does price elasticity of demand play such an important role in Ogligopolistic markets?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.FIGURE 10-1 Price G O EGAC OFBD EFBC D OGAD MC The profit-maximizing firm illustrated in Figure 10-1 operates in a monopolistically competitive industry. What is this firm's total revenue equal to? ATC AVC MR Quantity
- The monopolistically competitive firm represented in the graph is in: $ $11.40 $10.20 $7.50 0 520 630 MC ATC MR Firm's Demand Quantity Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a long-run equilibrium since it is earning zero profit. b short-run equilibrium since it is earning zero profit. C short-run equilibrium, but not long-run equilibrium since it is earning positive economic profit. d long-run equilibrium, but not short-run equilibrium since it is earning positive economic profit. Your answerIf the typical firm in a monopolistically competitive industry is in the situation Q as depicted in the figure, it should expect V in the number of Monopolistically Competitive Firm firms in its market and V in the demand for its brand. MC SRATC D MR Output Price ($)$19 16 13 10 0 100 Multiple Choice $10. $13. Refer to the diagram for a monopolistically competitive firm in short-run $16. MC $19. 160180 210 Quantity MR ATC ibrium. This firm's profit-maximizing price will be
- Use the following graph for a monopolistically competitive firm to answer the next question. Dollars (5) 22 32 0 10 20 35 45 50 Quantity of Output (Units) This monopolistically competitive firm is earning economic profits in the short run and ATC Multiple Choice will continue to have economic profits in the long run will earn only normal profits in the long run this will cause its demand curve to shift to the right in the long run. this will cause its cost curves to rise in the long runA monopolistically competitive firm produces ________ output than a perfectly competitive firm with the same cost curves.The resulting equilibrium price under monopolistic competition is ________ than the equilibrium price under perfect competition. Question 1Answer a. more; lower b. less; higher c. less; lower d. more; higherm competing in a monopolistically competitive market. MC АТС P1 P2 P3 PA MR Q4 Q3 Quantity Q1 Q2 Price