What happens in the long run in monopoly and monopolistic competition?Barriers to entry allow sustained economic profits in a monopoly.Both types of markets have a long run equilibrium with zero economic profit.Barriers to entry allow sustained economic profits in monopolistic competition.Barriers to entry allow sustained economic profits in both types of markets. If market X was deemed to be an oligopoly, then what must be true?O The price is between the monopoly price and the competitive price.O The price is set at the market equilibrium.Price is set equal to marginal cost.Price equals ATC in long run equilibrium.

Monopoly is a form of imperfect competition. There is one firm. The number of consumers is high.…

Answered: What happens in the long run in…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 4CQQ

See similar textbooks

Similar questions

What is the market situation exist when there are many buyers and many sellers? O Monopoly Recession O None of the choices Oligopoly O Perfect competition *
Refer to the figure at right. Two firms operating in the same market must choose between a collude price and a cheat price. Firm A's profit is listed before the comma, B's outcome after the comma. If each firm tries to choose a price that is best for it, regardless of the other firm's price, which of these statements is correct? O A. Both firms should charge a cheat price. OB. Firm A should charge the collude price; Firm B should charge a cheat price. C. D. Both firms should charge a collude price. Firm A should charge a cheat price; Firm B should charge a collude price. Cheat Price Firm A Firm B Cheat Price Collude Price Collude Price 18, 18 6,30 30,6 24, 24
Air Canada and WestJet recently cut their prices for flights between Toronto and Edmonton to $199. In response, Porter Airlines cut its price from $239 to $199 for flights between Toronto and Edmonton in order to remain competitive. Based on this example, what degree of competition exists in the airline industry? Select one: O a. monopolistic competition O b. oligopoly O C. perfect competition O d. not enough information to answer O e. Monopoly B
If the economies of scale are so large that only one firm can survive in the industry, then that industry is called a(n): O A. oligopoly. O B. perfect competitor. O C. natural monopoly. O D. monopoly.
There are thousands of broadband internet providers in the country, while in a particular city the only way you can get it is through the phone, the cable company, and through DIRECTV. The best model to analyze this market is O monopoly. O monopolistic competition O oligopoly. O perfect competition.
K Which of the following statements is incorrect? In oligopoly www A. each firm's action is influenced by the actions and reactions of each other firm OB. barriers to entry prevent new firms entering OC. each firm is a price taker and the price is the monopoly profit-maximizing price OD. each firm's profit is influenced by each other firms' advertising Ō
Suppose the market for fast-food value meals is monopolistically competitive, with many restaurants selling their own brand of food. Assume the restaurants in the industry behave optimally by maximizing profit. The figure to the right represents the market for one monopolistically competitive firm's value meals. How will this figure change as the market moves toward long-run equilibrium? In the long run, O A. the average cost curve and the marginal cost curve will shift up because the firms are currently making profit. O B. the demand curve will shift to the left and become more elastic because the firms are currently making profit. nothing will change because monopolistically competitive markets have barriers to new firms entering. OC. O D. the demand curve will shift to the right and become more elastic because the firms are currently experiencing losses. O E. nothing will change because the firms in this market are breaking even. Price and cost (per value meal) 8.00- 7.60- 7.20 6.80…
Suppose the firm or firms in the market for Good A face a downward-sloping demand curve, maximize profit by producing the quantity at which marginal revenue equals marginal cost, set the price higher than the marginal cost, and break even in long run equilibrium. Which one of the following market structures most likely exists for Good A? O a. Monopoly. O b. Perfectly competition. O c. Monopolistic competition. O d. Oligopoly.
The market for agricultural products such as wheat or corn would best be described by which market model? O monopolistic competition Opure competition Opure monopoly oligopoly
Borough Market has many food shops that sell different types of cooked foods and drinks. It is relatively easy to open up a shop in the market and the sellers set different prices for their products ranging from £8 to £15. Based on this information, the food shops in the Borough market are in which kind of market structure? O Monopolistic Competition O Perfect Competition O Monopoly O Oligopoly
What term refers to companies shaping their actions based on what their competitors do? O allocative efficiency long run equilibrium mutual interdependence productive efficiency
Which of the following is an assumption of the theory of oligopoly? O Firms produce and sell either homogeneous or differentiated products. O There are no barriers to entry. O a and c There are many sellers and many buyers.

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Microeconomics

Economics

ISBN:

9781305156050

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Economics: Private and Public Choice (MindTap Cou…

Economics

ISBN:

9781305506725

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Principles of Microeconomics

Economics

ISBN:

9781305156050

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Economics: Private and Public Choice (MindTap Cou…

Economics

ISBN:

9781305506725

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Microeconomics: Private and Public Choice (MindTa…

Economics

ISBN:

9781305506893

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

SEE MORE TEXTBOOKS