Q2 a. Clearly describe and show using a market model and a firm’s individual cost curves...

Q2

a. Clearly describe and show using a market model and a firm’s individual cost curves model how the market demand curve (D) and the firm’s individual demand curve (d) are different in monopolistically competitive markets. Which is one is more elastic and why?

b. What are some examples of barriers to entry/exit? Describe at least 3

c. Using both a market model and an individual firm’s set of cost curves, show a monopolistically competitive firm that is earning positive economic profits in the short run. Then, show and clearly describe what will happen in the long run.

Expert Solution

Rahul Sunny answered 1 year ago

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