4. In order to improve your chances of matching with someone, you decide to update your online dating profile. Specifically, you decide that to impress potential partners you will show off what you know about monopolies and marginal revenue. Draft out an explanation as to what marginal revenue is and how it relates to price for the monopolist so that you can have them all wanting to swipe right!

4. In order to improve your chances of matching with someone, you decide to update your online dating profile. Specifically, you decide that to impress potential partners you will show off what you know about monopolies and marginal revenue. Draft out an explanation as to what marginal revenue is and how it relates to price for the monopolist so that you can have them all wanting to swipe right!

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter14: Monopolistic Competition And Product Differentiation

Section: Chapter Questions

Problem 10P

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Similar questions

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?
How does a monopolistic competitor choose its profit-maximizing quantity of output and price?
Aside from advertising, how can monopolistically competitive films increase demand for their products?
The graph presents the short-run costs and revenue for a Cost and revenue monopolistically competitive firm. Use this information to determine the profit-maximizing output and profit for this firm $800 Marginal cost Average total cost 750 in the short run. 700 650 600 What is the profit-maximizing output of this monopolistically 550 competitive firm? Round your answer to the nearest 500 whole number. 450 400 Demand 350 300 units of output 250 200 150 What is the maximum level of profits for this monopolistically 100 Marginal revenue competitive firm? Round your answer to the nearest 50 whole number. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Units of output %24
K Suppose the figure to the right represents the market for a particular brand of shampoo, such as L'Oreal, Lancome, or Maybelline. Assume the market is monopolistically competitive. What is the firm's profit-maximizing price and quantity? thousand per bottle. (Enter your The monopolistically competitive firm's profit-maximizing quantity is bottles of shampoo, and its profit-maximizing price is $ responses as integers.) Price and cost (per bottle) ♫ 3.00- MC 2.80- ATC 2.60- 2.40- 2.20- 2.00- 1.80- 1.60- 1.40- 1.20- 1.00- 0.80- 0.60- 0.40- 0.20- 0.00+ 0 MR 2 4 6 8 10 12 14 16 18 20 22 24 Quantity (shampoo bottles in thousands)
7. The figure shows the monopolistically competitive market for smartphones. Plot the profit-maximizing price and quantity on the graph. Is this producer earning positive or negative profits in the short run? In the long run, will supply or demand for this producer's good be affected? Will economic profits increase or decrease for this producer?
1. Briefly discuss the various ways monopolistically competitive firms can differentiate their products? 2. In the long-run, a perfectly competitive firm will earn what kind of economic profit?
Suppose the carwash market is monopolistically competitive and that businesses in this market are currently earning positive economic profits. In the long run, the demand for an individual car wash business will the market , which will cause economic profits to as more carwash businesses enter Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a fall; rise fall; fall to zero rise; fall to zero d rise; rise
Bob competes in a monopolistically competitive market. Suppose some new firms enter the market, causing his perceived demand curve to shift. The following tables show Original Demand Curve his demand curves, before and after the change, and his cost information. Price Quantity TC Assume that Bob can only choose from the quantities of output given in the table. By how much will his profit change after these new firms enter the market? $33 $20,000 $32 1,000 $30,000 $31 2,000 $45,000 $30 3,000 $70,000 $29 4,000 $100,000 New Demand Curve Price Quantity TC $30 $20,000 $29 1,000 $30,000 $28 2,000 $45,000 $27 3,000 $70,000 $26 4,000 $100,000 O his profits will not change O decrease by $9,000 O increase by $11,000 O decrease by $11,000
3. The accompanying graph (bottom of this page) summarizes the demand and costs for a firm that operates in a monopolistically competitive market. a. What is the firm's optimal output? b. What is the firm's optimal price? c. What are the firm's maximum profits? d. What adjustments should the manager be anticipating? $220 210 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 MC ATC 50 40 30 20 10 MR. 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Quantity 4. A firm has $1 million in sales, a Lerner index of 0.65, and a marginal cost of $35, and competes against 1,000 other firms in its relevant market. a. What price does this firm charge its customers? b. By what factor does this firm mark up its price over marginal cost? c. Do you think this firm enjoys much market power? Explain.
3. How does a monopolistic competitor choose its profit-maximizing quantity of output and price?
Exercise A.6. Do monopolistically competitive markets normally have the optimal number of products?