No Long-Run Economic Profits 1717 unread replies.1717 replies. a) Explain & depict the LongRun equilibrium for...

No Long-Run Economic Profits 1717 unread replies.1717 replies. a) Explain & depict the LongRun equilibrium for a monopolistically competitive firm. *Draw and upload graphs to depict the long-run

Expert Solution

Answer) Monopolistic Competition is the market where there are large number of buyers and sellers selling differentiated products with free entry and exit in the market.

MonopolisticCompetition has a downward sloping AR & MR curve because for selling additional output they have tioreduce their price but MR & AR under monopolistic competitions is flatter than under monopoly with free entry and exit firms always make normal profit in the long run. In the short run the firms can make normal profit, super normal profit or loss dependent on market position of AR & AC in equilibrium but in the long run abnormal profit of the firm will result in increasing entering by new firm which reduces profit by shifting the AR curve downward ( falling share in the market). It continues until new equilibrium is attained with tangency of AR & AC.

Note : Please like my answer and comment for further clarification, it's urgent.

Rahul Sunny answered 6 months ago

A) Explain & depict the LongRun equilibrium for a monopolistically competitive firm, and draw and upload...

A) Explain & depict the LongRun equilibrium for a monopolistically competitive firm, and draw and upload graphs to depict the long-run. Watch this video https://www.youtube.com/watch?v=RUVsEovktGU&feature=youtu.be please write your answer very clear so I can read it.

Economic Problem 8 8 unread replies. 8 8 replies. Read the following scenarios and answer the...

Economic Problem 8 8 unread replies. 8 8 replies. Read the following scenarios and answer the questions within them: Scenario 1: In Alaska, there is a piece of land on which rare and endangered species of wildlife live. There is also crude oil on the same piece of land. Use the production possibilities frontier model to explain the dilemma posed. Expound how the production possibilities frontier model can be used to solve the Alaskan problem. Scenario 2: Some people believe...

1. Draw the AD-AS model in long-run equilibrium. Using this graph, depict what happens in the...

1. Draw the AD-AS model in long-run equilibrium. Using this graph, depict what happens in the short run and in the long run if housing prices fall across the country. 2. Draw the AD-AS model when the economy is initially encountering an inflationary gap and then the government uses contractionary fiscal policy to return to long-run equilibrium.

Why are economic profits not possible in the long run in a purely competitive market? A....

Why are economic profits not possible in the long run in a purely competitive market? A. Each firm is too small to make profit. B. More firms will leave a profitable market, driving prices down. C. Profitable markets drive prices too high and comsumers stop buying. D. New firms will enter the matket and drive prices down.

Draw a Classical Economic Model that is operating at the long-run equilibrium. In the short run,...

Draw a Classical Economic Model that is operating at the long-run equilibrium. In the short run, what will most likely happen to RGDP if the AD curve shifts right? RGDP will increase RGDP will decrease RGDP will stay the same Draw a Classical Economic Model that is operating at the long-run equilibrium. In the long run what will most likely happen to RGDP if the AD curve shifts right? RGDP will continue to increase RGDP will continue to decrease RGDP...

Explain the following statements with economic reasoning and appropriate diagram(s) .The long-run equilibrium of a monopolistically...

Explain the following statements with economic reasoning and appropriate diagram(s) .The long-run equilibrium of a monopolistically competitive firm is neither productively efficient norallocatively efficient and there is an excess capacity.

In the long-run equilibrium, all firms in a perfectly competitive market earn zero economic profit. Explain...

In the long-run equilibrium, all firms in a perfectly competitive market earn zero economic profit. Explain why this is true using intuition and graphs.

Long run economic profits are always zero for which of the following market structures? a. Perfect...

Long run economic profits are always zero for which of the following market structures? a. Perfect competition b. Monopolistic competition c. Monopolies d. Perfect competition and monopolistic competition e. Monopolistic competition and monopolies f. Perfect competition, monopolistic competition, and monopolies

Why in PC will long run economic profits be zero? What characteristic of PC drives this...

Why in PC will long run economic profits be zero? What characteristic of PC drives this result?

1. Do you think that in oligopolies, economic profits in the long run can be positive...

1. Do you think that in oligopolies, economic profits in the long run can be positive – please discuss in detail and provide examples. 2. Find two companies and discuss they fall for oligopolies – justify your reasoning.

Question