Illustrate a typical monopolistically competitive firm in short- run equilibrium with economic profit. How will demand,...

Illustrate a typical monopolistically competitive firm in short- run equilibrium with economic profit. How will demand, average cost and profit change in the long run? Explain. Will the firm achieve minimum efficient scale? Explain. What is the source of the firm’s market power?

Expert Solution

Rahul Sunny answered 1 year ago

28. Suppose that a monopolistically competitive firm has an economic profit in the short run. in...

28. Suppose that a monopolistically competitive firm has an economic profit in the short run. in the long run, its economic profit will be zero. In the transition from short run to long run, which curve moved which way? Group of answer choices The ATC curve shifted down. The demand curve shifted left. The ATC curve shifted up. The demand curve shifted right. 29. The criterion for efficiency from the firm perspective is if the firm minimizes _______. The criterion...

Assume a firm in a monopolistically competitive industry is currently making a short run positive economic profit.

Assume a firm in a monopolistically competitive industry is currently making a short run positive economic profit. Describe what is likely to happen to this firm's profit in the long run. What role does elasticity play in this story?

Suppose that a typical firm is receiving economic profits in the short run in a monopolistically...

Suppose that a typical firm is receiving economic profits in the short run in a monopolistically competitive industry. Carefully explain what will happen in the long run to: the number of firms the demand curve facing each firm price individual firm output and industry output economic profits or losses

A monopolistically competitive firm in long-run equilibrium: will make negative profit. will make zero profit. will...

A monopolistically competitive firm in long-run equilibrium: will make negative profit. will make zero profit. will make positive profit. Any of the above are possible. None of the above are possible. The Cournot model of symmetric duopoly suggests that the market equilibrium position is such that: one firm is larger than the other in the final equilibrium and the largest firm produces the largest quantity of output. economic profits are zero for both firms. total industry output is the same...

The demand for the product of a typical firm in a monopolistically competitive market tends to...

The demand for the product of a typical firm in a monopolistically competitive market tends to be more price inelastic than the demand for the product of a monopolist. Do you agree or disagree?

Explain why a monopolistically competitive firm earns zero economic profit in the long run and show...

Explain why a monopolistically competitive firm earns zero economic profit in the long run and show graphically how they charge a higher price then perfectly competitive firms and are not cost efficient.

1. The difference between a monopolistically competitive firm in the short run versus the long run...

1. The difference between a monopolistically competitive firm in the short run versus the long run is: profit is equal to zero in the long run but not the short run. firms only have P > MC in the short run but not the long run. firms only produce at MR = MC in the short run. firms only have P > MC in the long run but not the short run. This is true because: the industry can be...

1. Draw a graph of a monopolistically competitive firm that is currently earning a short run...

1. Draw a graph of a monopolistically competitive firm that is currently earning a short run profit. Be sure to include marginal revenue, demand, marginal cost and average total cost curves. What will happen to this firm as it enters the long run? 1b. What would you expect to happen to these initial firms as more and more pubs begin branching out into other markets? Multiple Choice/True False Questions: 1. The fact that pubs are now competing with firms like...

2. (a) “The short-run equilibrium of a perfectly competitive firm is similar to its long-run equilibrium”....

2. (a) “The short-run equilibrium of a perfectly competitive firm is similar to its long-run equilibrium”. Do you agree? Explain your answer (b) Monopolists have adverse effects on the consumer society and should be eliminated”. Discuss. (1200 words)

1. In the short run, monopolistically competitive firms: a) will earn zero economic profits by acting...

1. In the short run, monopolistically competitive firms: a) will earn zero economic profits by acting like a monopolist. b) can earn positive economic profits by acting like a monopolist. c) will earn zero economic profits by acting like a perfectly competitive firm. d) can earn positive economic profits by acting like a perfectly competitive firm. 2. Product differentiation refers to: a) the process of informing the public of differences in products as a result of error. b) firms who...

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