Explain the differences between perfect competition and monopolistic competition. b. Explain the long run equilibrium for...

Explain the differences between perfect competition and monopolistic competition. b. Explain the long run equilibrium for a monopolistically competitive firm that is earning economic profits in the short run.( use diagram to support answer)

Expert Solution

Rahul Sunny answered 1 year ago

Describe and illustrate the difference between perfect competition and monopolistic competition in the long run. Comment...

Describe and illustrate the difference between perfect competition and monopolistic competition in the long run. Comment on long run profit, price sensitivities that firms are responding to as well as welfare and efficiency outcomes in both cases.

Answer the following questions comparing monopolistic competition to perfect competition. a. In the long run, how...

Answer the following questions comparing monopolistic competition to perfect competition. a. In the long run, how does the profit earned by a firm operating in a monopolistically competitive market compare to the profit the same firm would earn if it were instead operating in a perfectly competitive market? Please explain. b. In the long run, how does the average cost of production for a firm operating in a monopolistically competitive market compare to the average cost of production for the...

In the situation of perfect competition, in long run equilibrium which of the following is not...

In the situation of perfect competition, in long run equilibrium which of the following is not true: the marginal cost curve intersects the average cost curve at the minimum point of the average cost curve. average costs are equal to the market price of the good. average costs are equal to marginal revenue. the demand curve facing the individual firm has a downward slope. Assuming long-run equilibrium exists, when demand increases in a perfectly competitive market, in the long run...

4. Perfect competition vs. monopolistic competition: (a) What is the difference between perfect competition and monopolistic...

4. Perfect competition vs. monopolistic competition: (a) What is the difference between perfect competition and monopolistic competition? (b) Suppose the only long-run adjustment is free entry or exit of firms. What is the difference between the short-run equilibrium conditions faced by a perfectly competitive firm and a monopolistically competitive firm? How about the long-run equilibrium conditions?

1. In both perfect competition and monopolistic competition, in the long run typical firms earn zero...

1. In both perfect competition and monopolistic competition, in the long run typical firms earn zero economic profit. Which of the market characteristics is most responsible for this zero economic profit? There are many buyers and sellers in these markets. There is no government control of price in these market. Identical (homogeneous) products are sold in these markets. Differentiated products are sold in these markets. There are no significant barriers to entry to these markets. 2. If a firm in...

Answer the following questions comparing monopolistic competition to perfect competition. I. In the long run, how...

Answer the following questions comparing monopolistic competition to perfect competition. I. In the long run, how does the profit earned by a firm operating in a monopolistically competitive market compare to the profit the same firm would earn if it were instead operating in a perfectly competitive market?Please explain.b. In the long run, how does the average cost of production for a firm operating in a monopolistically competitive market compare to the average cost of production for the same firm...

What is perfect competition? How the equilibrium price and output in the short and long run...

What is perfect competition? How the equilibrium price and output in the short and long run can be decided by a firm. Justify the answer by drawing the right graphs.

1.The main difference between pure competition and monopolistic competition is: a. there are no differences b....

1.The main difference between pure competition and monopolistic competition is: a. there are no differences b. in monopolistic competition there are a large number of firms c. in monopolistic competition it is easy for firms to enter and exit d. in monopolistic competition firms' products are differentiated 2. Firms in monopolistic competition may advertise in hopes of: a. increasing demand and making it more inelastic b. increasing demand and making it more elastic c. decreasing demand and making it more...

The long-run profit-maximizing equilibrium of a firm in monopolistic competition in many ways is similar as...

The long-run profit-maximizing equilibrium of a firm in monopolistic competition in many ways is similar as well as different from both under monopoly and that for a firm in a perfectly competitive market. Using three separate diagrams, articulate the differences and similarities (demand conditions, cost conditions and level of profits).

1. In monopolistic competition, the long-run equilibrium results in zero economic profit of the firms in...

1. In monopolistic competition, the long-run equilibrium results in zero economic profit of the firms in these industries. The key factor in this is a. differentiated products. b. freedom of entry into and exit from the industry. c. price discrimination. d. brand names. 2. In the long run, a monopolistically competitive industry is characterized by all of the following, except a. an efficient use of resources. b. production that would exhibit lower costs per...

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