Which of the conditions that define perfect competition fail in monopolistically competitive markets? Question 2Answer a. There are many consumers in the market b. Consumers are fully informed c. Firms sell identical products d. There are many firms in the market e. Firms can freely enter and exit the market
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- 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.In the long run, firms in a monopolistically competitive market will earn __________ profits. Question 20Answer a. Zero b. Negative c. Positive d. UnknownFigure 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
- The monopolistically competitive firm represented in the graph is in: $ $11.40 $10.20 $7.50 0 520 630 MC ATC MR Firm's Demand Quantity Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a long-run equilibrium since it is earning zero profit. b short-run equilibrium since it is earning zero profit. C short-run equilibrium, but not long-run equilibrium since it is earning positive economic profit. d long-run equilibrium, but not short-run equilibrium since it is earning positive economic profit. Your answerFigure 16-5 Markup Q" Qc MC ATC a. profit-maximizing output b. efficient scale output C. inefficient output d. excess capacity D Consider that Figure 16-5 represents a monopolistically competitive firm. What does the distance between Q** and Qc represent?The feature that distinguishes monopolistic competition from perfect competition is that monopolistically competitive firms are a. able to differentiate their products. b. price takers. c. large relative to the market. d. able to block the entry of other firms.
- In monopolistically competitive markets, products are ____ and entry is ____. Select one: a. differentiated; free b. identical; free c. differentiated; hard d. identical; hardMonopolistically competitive firms use product differentiation to a.limit the number of firms in the industry. b.ensure long-run profits. c.achieve market power. d.block other firms from entering the industry.Exercise A.7. If you were thinking about getting into the ice cream business, would you try to make an ice cream exactly like the (successful) brands that already exist? Explain your decision using the ideas about monopolistic competition
- A fast-food restaurant decides to raise the price of its hamburgers. Assume the firm is in a monopolistically competitive industry. What will happen to the demand for its hamburgers? When the fast-food restaurant raises the price of hamburgers, A. all of its customers will be willing to pay the higher price because this restaurant is close to them. B. some of its customers will be willing to pay a higher price because they prefer this brand of hamburgers. c. all of its customers will be willing to pay the higher price because this restaurant faces no competition. D. none of its customers will be willing to pay the higher price because this restaurant faces competition from other restaurants. E. none of its customers will be willing to pay the higher price and will stop buying hamburgers.Part II | The graph below shows a monopolistically competitive firm in the short run. Price and Cost 8 9 8 20 0 100 MR 200 300 400 500 600 700 800 Output MC 9. What is the firm's profit-maximizing price and quantity? 10. How much profit does that firm make at that price and quantity? 900 ATC -d-pWhich of the following is a characteristic of monopolistic competition? A. Many sellers with identical products B. Few sellers with differentiated products C. Few sellers with identical products D. Many sellers with differentiated products