Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 10, Problem 2SQ
To determine
Nature of goods produced under the
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What is the first item to identify when determining the short-run equilibrium for a monopolistically competitive firm?
a. the total profits
b. the total revenue
C. the total costs
d. the profit-maximizing level of output
Which of the following statements is correct?
a. In the long run, both perfectly competitive firms and monopolistically competitive firms operate with excess capacity.
b. A firm operates with excess capacity when, in the long run, its level of output is below the efficient scale.
c. For any firm, efficient scale is the level of output at which the average-total-cost curve is tangent to the demand curve.
d. All of the above are correct.
Monopolistically 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.
Chapter 10 Solutions
Economics For Today
Ch. 10.1 - Prob. 1YTECh. 10.5 - Prob. 1GECh. 10.6 - Prob. 1YTECh. 10 - Prob. 1SQPCh. 10 - Prob. 2SQPCh. 10 - Prob. 3SQPCh. 10 - Prob. 4SQPCh. 10 - Prob. 5SQPCh. 10 - Prob. 6SQPCh. 10 - Prob. 7SQP
Ch. 10 - Prob. 8SQPCh. 10 - Prob. 9SQPCh. 10 - Prob. 10SQPCh. 10 - Prob. 11SQPCh. 10 - Prob. 12SQPCh. 10 - Prob. 13SQPCh. 10 - Prob. 1SQCh. 10 - Prob. 2SQCh. 10 - Prob. 3SQCh. 10 - Prob. 4SQCh. 10 - Prob. 5SQCh. 10 - Prob. 6SQCh. 10 - Prob. 7SQCh. 10 - Prob. 8SQCh. 10 - Prob. 9SQCh. 10 - An oligopoly is a market structure in which a. one...Ch. 10 - Prob. 11SQCh. 10 - Prob. 12SQCh. 10 - Prob. 13SQCh. 10 - Prob. 14SQCh. 10 - Prob. 15SQCh. 10 - Prob. 16SQCh. 10 - Prob. 17SQCh. 10 - Prob. 18SQCh. 10 - Prob. 19SQCh. 10 - Prob. 20SQ
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- When monopolistically competitive firms earn ________ profits, other firms ________ the industry in the long run. a. normal; exit b. positive economic; enter c. negative economic; enter d. normal; enterarrow_forwardThe cost of producing a tube of tooth paste is $0.05. If the market for tooth paste is monopolistically competitive, a manufacturer who charges $0.05 for each bottle will ________. a. exit the industry in the long run b. earn zero economic profits in the short run c. incur a loss in the short run d. shut down production in the short runarrow_forwardThe figure shows the situation facing Smart Digit, Inc., a firm in monopolistic competition that produces calculators. What is the firm's profit-maximizing price? OA. $10 B. $4 OC. $8 OD. $12arrow_forward
- If Amazon sells dozens of similar types of pencils at slightly different prices, we might assume the pencil market is _________. Select one: a. an oligopoly. b. a monopolistically competitive market. c. a monopoly. d. a perfectly competitive market.arrow_forwardPrice is NOT a firm decision variable in a( n ) ________ industry. a. oligopolistic b. monopolistically competitive c. perfectly competitively d. monopolisticarrow_forwardWhich of the following is different about perfect competition and monopolistic competition? a. In monopolistic competition, entry into the industry is unblocked. b. Firms in monopolistic competition compete on their product's price as well as its quality and marketing. c. Perfect competition has a large number of independently acting sellers. d. Only firms in monopolistic competition can earn an economic profit in the short runarrow_forward
- If a firm is operating in a monopolistically competitive market, then in the long run: A. the firm will maximize its profit by producing the output level at which the marginal revenue is minimized. B. the firm will earn zero economic profit. C. the firm will maximize its profit by producing the output level at which the average cost is minimized. D. all of the abovearrow_forwardAll of the following are characteristics of long-run equilibrium for firms in a monopolistically competitive market except: A. price equals marginal cost. B. price equals average total cost. C. price exceeds the minimum of average total cost. D. marginal cost equals marginal revenue.arrow_forwardWhich of the following is not true of a monopolistically competitive firm? a. The firm will not likely earn an economic profit in the long run. b. The firm will maximize profits by producing where MR = MC. c. The firm will produce an efficient quantity where average total cost is minimized.arrow_forward
- In monopolistically competitive markets, products are ____ and entry is ____. Select one: a. differentiated; free b. identical; free c. differentiated; hard d. identical; hardarrow_forward3. You are hired as a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maximizing profit? If not, what should it do to increase profit? If the firm is maximizing profit, is the market in a long-run equilibrium? If not, what will happen to restore long-run equilibrium? a. P < MC, P > ATC b. P > MC, P < ATC c. P = MC, P > ATC d. P > MC, P = ATCarrow_forwardWhich of the following statements is true? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. b С d Monopolistic competitive firms that earn economic profits in the short run commonly will find their profits competed away in the long run. Monopolistic competitive firms will earn economic profits in the long run because of their ability to control the price of the product. Monopolistic competitive firms will earn zero economic profits in both the short and the long run. Monopolistic competitive firms must earn economic profits in the long run, or they will shut down.arrow_forward
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