Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms?...

Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ________ and then use the _________ curve to determine the price that is consistent with this particular quantity.
A. average total cost; demand
B. average variable cost; demand
C. average total cost; supply
D. marginal revenue; demand
E. marginal revenue; supply

14. When a firm operates in a state of excess capacity,
A. it must be operating in a monopolistically competitive market.
B. additional production would increase average total cost.
C. additional production would decrease the average total cost.
D. A and B, only
E. A and C, only
15. A monopolistically competitive firm is currently producing 15,000 units of output. At this level of output the firm is charging a price equal to $10, has marginal revenue equal to $6, has marginal cost equal to $6, and has average total cost equal to $12. From this information we can infer that
A. the firm is currently maximizing its profit or minimizing its loss.
B. the profits of the firm are equal to negative $30,000.
C. firms are likely to enter this market in the long run.
D. All of the above are correct.
E. A and B, only

Expert Solution

Q13. Option D.

Q14. Option E. It refers to situation where the firm is producing less than capacity and can reduce the cost by producing more

Q15. Option D. Profit = TR-TC = 15000*10-15000*12 = - $30000

Rahul Sunny answered 2 years ago

"Compare and contrast the output and pricing decisions of monopolistically competitive firms with those of perfectly...

"Compare and contrast the output and pricing decisions of monopolistically competitive firms with those of perfectly competitive firms." Your response should be no less than one page long, size 12 font, and double spaced.

Which of the following is most accurate? perfectly competitive firms are price takers. monopolistically competitive firms...

Which of the following is most accurate? perfectly competitive firms are price takers. monopolistically competitive firms offer a differnetiated product. In a duopoly, only two firms are competing Monopolies use the rule MR=MC to maximize profit. All the above.

Monopolistically competitive market with N firms

Consider a monopolistically competitive market with N firms. Each firm's business opportunities are described by the following equations:Demand: Q=100/N-PMarginal Revenue: MR=100/N-2QTotal cost: TC=50+Q(squared)Marginal Cost: MC=2Qa. How does N, the number of firms in the market, affect each firms demand curve? Why.b. How many units does each firm produce? (The answer to this and the next two questions depend on N.)c. What price does each firm charge?d. How much profit does each firm make?e. In the long run, how many firms...

Which of the following statements is true regarding Subchapter S firms? a)These firms are liable to...

Which of the following statements is true regarding Subchapter S firms? a)These firms are liable to pay federal income taxes. b)These firms cannot have more than 100 shareholders. c) These firms need to pass-through at least half of their earnings to their shareholders. d) Income from these firms is tax-exempt for its shareholders. e) All of the options are true for Subchapter S firms.

compared with firms in a perfectly competitive industry, firms in a monopolistically competitive industry are inefficient...

compared with firms in a perfectly competitive industry, firms in a monopolistically competitive industry are inefficient because thery a. do not lower the product price if put prices fall b. waste resources by producing an excess amount of output c. restrict their output levels to maximiz profirs d make economic profits in the long run. which of the following statement is true about a firm in a perfectly competitive market a. the demand for its product is a downward sloping...

Compare and contrast monopolistically competitive firms with competitive firms. Be sure to explain what is similar...

Compare and contrast monopolistically competitive firms with competitive firms. Be sure to explain what is similar in each industry and what is different. Make sure to address how many firms are in the industry, whether the product is homogenous or differentiated, conditions of entry and exit, and both short-run and long-run economic profit. (pls explain more as I'm only in intro to Micro, thx)

true/false explain. Since the firms in a monopolistically competitive industry make zero profit in the long...

true/false explain. Since the firms in a monopolistically competitive industry make zero profit in the long run (same long-run profit outcome as the perfectly competitive market), monopolistically competitive markets are as efficient as perfectly competitive markets.

Which of the following statements regarding absorption cost pricing formulas is/are true? i. Absorption cost pricing...

Which of the following statements regarding absorption cost pricing formulas is/are true? i. Absorption cost pricing formulas provide a justifiable price that tends to be perceived as equitable by all parties. ii. Since absorption cost information is necessary for external reporting, it is cost effective to use it for pricing. iii. Absorption cost-plus pricing formulas generally will result in a higher mark-up percentage than variable manufacturing cost formulas. All of the given answers i and ii i and iii ii...

1- Which of the following is true regarding the Capital Asset Pricing Model (CAPM)? A. It...

1- Which of the following is true regarding the Capital Asset Pricing Model (CAPM)? A. It is a model that links the notions of risk and return B. Uses beta, the risk-free rate and the market return to define the required return on an investment C. As beta increases, the required return for a given investment increases D. All of the above are true. 2- Top down approach to Traditional Security Analysis involves the following three steps in which order?...

A monopolistically competitive firm sells a differentiated product but there are many firms and there is...

A monopolistically competitive firm sells a differentiated product but there are many firms and there is competition involved..How do such firms still manage to promote their product? Do they make Economic profit in the long run?

Question