In monopolistically competitive markets, positive economic profits Select one: a. are never possible. b. suggest that new firms will enter the market. c. are sustained through government-imposed barriers to entry. d. suggest that some existing firms will exit the market.

In monopolistically competitive markets, positive economic profits Select one: a. are never possible. b. suggest that new firms will enter the market. c. are sustained through government-imposed barriers to entry. d. suggest that some existing firms will exit the market.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 9RQ: If the firms in a monopolistically competitive market are earning economic profits or losses in the...

See similar textbooks

Related questions

Q: If the own-price elasticity is equal to -1, then demand for the good is said to be: a) Elastic b)…

A: Price elasticity is a measure of the responsiveness or sensitivity of the quantity demanded or…

Q: The foreign purchases effect on aggregate demand suggests that a fall in our domestic price level…

A: This can be defined as a concept that shows the total demand for the products and the services in a…

Q: Week Eight Discussion 1. Describe some of the different types of budgets. What are the advantages of…

A: Budgets are financial road maps that delineate an organization's anticipated income and expenditures…

Q: In a diagram, how is the effect of an increase in the price of a variable input illustrated?…

A: The extra expense incurred by manufacturing an additional unit of an item or service is referred to…

Q: First Call, Inc. is a smartphone company. First Call expects its profits to double next year.…

A: Loanable Funds: refers to the total amount of funds available in the financial market for lending to…

Q: 17) The demand curve for tickets to the George Winston concert (with special guest star, Kenny G) is…

A: Consumer Surplus: Consumer surplus is the net benefit that the consumer receives by purchasing…

Q: What do economists mean when they say that competitive markets are more efficient than monopolistic…

A: A competitive market, also known as a perfectly competitive market, is a type of market structure…

Q: Complete the following table by determining Raphael's marginal rate of substitution (MRS) between…

A: The marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of…

Q: The following graph shows the market for microwavable ramen noodles. Pramen O Price increase,…

A: Market equilibrium: At the market equilibrium demand equals supply. Or at market the equilibrium…

Q: a. The local government builds a new school. b. Teachers in the new school hold classes for young…

A: The construction of a new school typically increases productivity in the long run. While the…

Q: Study the diagram below and answer the question. A C+1 10 1 Yo Y₁ Which one of the following…

A: In the graph, the consumption curve is C, and the aggregate expenditure curve is A. Basic…

Q: sort the following scenarios according to whether they would cause a shift in the demand curve or…

A: A demand curve shift occurs when there is a change in the demand for a good or service due to a…

Q: Harold lives on Doritos and seafood salads. The price of Doritos is 1 dollar per bag and the price…

A: Price of Doritos = 1 Price of Seafood =2 Total Money to be spent = 11Calories in Doritos = 1500…

Q: . Derive the ordinary demand curve. Calculate the own-price and cross price elasticities for U = min…

A: Utility function : U = min { 2x , y } Price of X : Px = 2 Price of Y : Py = 2Income = 60Thereofe ,…

Q: Figure 26-3. The figure shows two demand-for-loanable-funds curves and two supply-of-loanable-funds…

A: Loanable funds is defined as the theory for determining rate of interest in the market. The demand…

Q: Suppose that an industry's long-run minimum averagé total cost is $2 per unit of the good. If market…

A: The demand curve shows the association between a good's price (Y-axis) and the amount demanded of it…

Q: An equilibrium in the reserve market occurs at the downward slope of the demand curve. The…

A: Demand is the desire backed by willingness and ability to pay by an individual or a consumer. Supply…

Q: If you want to withdraw $10,000 at the the end of two years and $35,000 at the end of four years,…

A: At the end of two years, the cash flow is $10,000 and at the end of four years, the cash flow is…

Q: Compare and contrast the Fed's monetary policy response to the surge in desired reserves and…

A: Monetory policy is made by central monetary authority or central of a country to contain inflation,…

Q: In the figure above, which of the following statements makes sense? Group of answer choices A)…

A: For the production of the goods and services , firm incurred some cost . There is mainly 2 type of…

Q: Prove the uniqueness part of the VNM expected utility theorem. Comment. It is relatively…

A: The Von Neumann-Morgenstern utility theorem is a concept in utility theory. It states that if…

Q: Xia's utility function is U = TC, where T is baskets of tomatoes and C is bags of carrots. One of…

A: Indifference curve: Indifference curve shows different combinations of 2 goods such that consumer’s…

Q: Saving-Investment Diagram Real Interest Rater (percen C Curve Investment Curve DE F GH Desired…

A: Net capital outflow holds relevance in the contemporary economic landscape due to its reflection of…

Q: Explain how the following shocks affect the ISLM model. Describe what happens to the curves, as well…

A: IS curve: IS curve shows different combinations of interest rates and income. Such that for each…

Q: 3-21. You can buy a machine for $100,000 that will produce a net income, after operating expenses,…

A: Cash flow:The sum of the total money is represented in the diagram. It represents the magnitude and…

Q: Government regulations and the causes of the 2008 financial crisis: which existing regulations…

A: Deregulation refers to the removal or relaxation of government rules and restrictions in a…

Q: If the demand for a product is perfectly elastic, a tax of $1 per unit imposed on sellers will a.…

A: This can be defined as the concept that shows the revenue of the government of that nation by which…

Q: Draw a production possibilities curve for food and clothing. If you are operating on the curve, what…

A: The Production Possibilities Frontier (PPF) illustrates all the possible output combinations of two…

Q: The graph shows the marginal cost curve, average total cost curve, demand curve, and marginal…

A: Monopolistic Competition: A firm in the monopolistic market has some control over price (although it…

Q: At higher prices, the price elasticity of demand is likely to be A. perfectly elastic; perfectly…

A: Demand elasticity measures how sensitive a good's quantity desired is to variations in its price. It…

Q: Can I see a graph for 1. (b) to illustrate the price of coffee beans increasing

A: The demand curve shows an inverse relationship between price and quantity demanded. The supply curve…

Q: Refer to Table 9-11. Suppose an economy has only three goods and the typical family purchases the…

A: Consumer Price Index (CPI) measures the change in average price of fixed basket of goods. it is used…

Q: In the above figure, which of the following is TRUE regarding the movements from point A to B and…

A: Production possibility frontier shows the different combinations of two commodities that are…

Q: Which of the following is the best example of the economic concept of scarcity? a) The Talking Teddy…

A: Scarcity arises because the resources are finite and human wants are unlimited. So there arises a…

Q: The town has a kayak rental and visitors use the lake for recreation. The town also has a chemical…

A: The economic effects of environmental policies are the focus of environmental economics. When we…

Q: The figure shows the supply curve of lead. What is the price elasticity of supply between points A…

A: The price elasticity of supply is calculated as the percentage change in quantity supplied divided…

Q: An economist would be more likely to argue against reducing inflation if she thought that a. the…

A: Credibility of the Central Bank refers to the public's belief and confidence in the central bank's…

Q: Suppose a municipality votes to reduce the combined pollution introduced by three local companies.…

A: It can be defined as the additional cost pursued when producing one additional unit of a commodity…

Q: following is true? A Nash equilibrium is always a perfect subgame equilibrium in a multistage…

A: A Nash equilibrium is an idea in game theory, which is a part of mathematics and economics that…

Q: Consider each scenario independently. In each of the following cases tell me, using written and…

A: The demand curve shows an inverse relationship between price and quantity demanded.The supply curve…

Q: A government official states: “To increase the number of workers in the senior-care industry,…

A: A labor market is a dynamic and complex economic system that encompasses the interactions between…

Q: Select the number of the question and the letter to indicate the answer you consider correct for…

A: As per the guidelines we are allowed to answer the first three subparts only. Please post the…

Q: The table below shows the market for AA batteries in Tulsa, Oklahoma, when tornadoes threaten the…

A: Deadweight loss is a cost to society created by market inefficiency when supply and demand are not…

Q: Using the graph below, use the production possibilities curve/ frontier PP1 curve to answer the…

A: PPC: Graphical representation of the combination of two goods that can be produced in the economy in…

Q: One of these four answers best explains the effect of disposable income on consumption. Which one? O…

A: Consumption is the purchase of a good by the consumer with the available income. It is affected by…

Q: In the figure to the right, the economy experiences inflation in the second period. What would be…

A: The monetary policy is followed by the Central bank of country. Monetary policy refers to the policy…

Q: Part I: Suppose you are a member of the Texas Legislature and you have to give your recommendation…

A: Making choices for the local distribution of a $100 million budget for various public services and…

Q: The following graph shows the loanable funds market. For each of the given scenarios, adjust the…

A: Loanable Funds Market: In the market for loanable funds there are economic agents like governments,…

Q: The table below shows the demand schedule for a monopolist. Marginal revenue associated with the…

A: The marginal revenue is defined as the additional revenue that is earned from the sale of an…

Q: Assume that Jamaica’s unemployment rate currently stands at 4.5%. What does this tell you about the…

A: An individual who is able to work, actively seeking employment, and wants to work is said to be…

Question

ed
30
on
In monopolistically competitive markets, positive economic profits
Select one:
O
O
O
a. are never possible.
b. suggest that new firms will enter the market.
c. are sustained through government-imposed barriers to entry.
d. suggest that some existing firms will exit the market.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduce the monopolistically competitive markets

VIEW

Step 2: Explain the correct and incorrect options

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is the relationship between product differentiation and monopolistic competition?
If the firms in a monopolistically competitive market are earning economic profits or losses in the short run, would you expect them to continue doing so in the long run? Why?
Aside from advertising, how can monopolistically competitive films increase demand for their products?
三 EE в IU A 1 Which of the following is likely to occur in the long run based on the graph of the monopolistically competitive firm below? MC MR A. New firms are likely to enter the market decreasing prices and profits for all firms. B. New firms are likely to enter the market increasing prices and profits for all firms. C. Existing firms are likely to exit the market decreasing prices nd profits for all remaining firms. D. Existing firms are likely to exit the market increasing prices and profits for all remaining firms. E. hone of the above
Monopolistically competitive firms use product differentiation to Question 3Answer a. block other firms from entering the industry. b. limit the number of firms in the industry. c. ensure long-run profits. d. achieve market power.
Which industry or industries below might operate in a monopolistically competitive market? a. a barber shop b. a cerain brand of coffee c. a hotel (it is the only one int own) d. a pateneted lifesaving medicine e. both c and d
arks Window Help sgsc.view.usg.edu economics Section 2 Spring 2024 CO - South Georgia State College Exhibit 10-15 G The term monopolistic competitionQuestion 3 options:is an alternate expression for me Boone Tobacco Eagle Tobacco Advertise Don't advertise Advertise Eagle Tobacco $1150, Boone $1150 Eagle Tobacco $630, Boone $2020 Don't advertise Eagle Tobacco 2020, Boone $630 Eagle Tobacco $1500, Boone $1500 Exhibit 10-15 depicts the payoff matrix facing Eagle Tobacco and Boone Tobacco with respect to their decisions to advertise or not. What strategies will maximize their combined profit? Eagle advertise and Boone doesn't Both advertise Eagle doesn't advertise and Boone does Neither advertises 0:10:03 ela
Give two characteristics of the following:a. a perfectly competitive marketb. a monopolistic market
The major difference between monopolistic competition and monopoly is a. how the quantity of output is determined. b. only a monopoly can earn an abnormal profit in the long run. c. monopoly is a price taker, and a firm in monopolistic competition is a price maker d. only firms in monopolistic competition are protected by barriers to entry
Exercise A.13. Explain and graph the long-run equilibrium of a monopolistic firm and that of a perfectly competitive firm. Compare both situations in terms of the level of production, prices and economic efficiency.
Figure 16-10 The figure is drawn for a monopolistically-competitive firm. 160 140 123.33 90 QUESTION 1 56.67 Price 100 133.33 154.92 MR MC ATC Demand Refer to Figure 16-10. As the figure is drawn, the firm is in a. neither a short-run equilibrium nor a long-run equilibrium. b. a long-run equilibrium but it is not in a short-run equilibrium. c. a short-run equilibrium but it is not in a long-run equilibrium. d. a short-run equilibrium as well as a long-run equilibrium. Quantity
Suppose new firms enter a monopolistically competitive market. What is the effect of new firms entering the market from the perspective of the firms that were already in the market? Question 11Answer a. Positive supply shock b. Positive demand shock c. No effect d. Negative supply shock e. Negative demand shock