Draw a graph, showing a firm in long run monopolistically competitive equilibrium. Label everything clearly. Can a firm under monopolistic competition make economic profits in the long run? Why or why not? Expl
The Monopolistic Competition graph is the same as the monopolies graph. The firm has the same short and long equilibrium and makes zero economic profits. Using theProfit Maximization Rule, MC = MR, we can find the quantity and draw a vertical line to theDemandcurve, and thus find the corres...
If displayed on a supply-demand graph, perfect competition would demonstrate perfectly elastic demand, while monopolistic competition would show a downward sloping curve. Because of the excess capacity, the potential markup in perfect competition is near zero, i.e. the selling price equals the ...
18. Consumer Choice and Behavioral Economics1h 16m 13. Monopolistic Competition Topic summary First, find the Quantity where MR=MC.At that quantity, find Price and ATC.Profit = (Price - ATC) * Quantity 1 concept Monopolistic Competition Profit on the Graph ...
KRUGMAN'S MICROECONOMICS for AP* Introduction to Monopolistic Competition Margaret Ray and David Anderson Micro: Econ: Module. © 2007 Thomson South-Western. Monopolistic Competition Characteristics: –Many sellers –Product differentiation –Free entry and exit –In the long run, ...
can maximize its profit by producing an output at which itsmarginal revenueis equal to itsmarginal cost. The profit that a monopolistically-competitive firm can earn in the short-run equals (P – ATC) × Q. The following graph shows short-runprofit maximizationin monopolistic competition. ...
Too Long; Didn't ReadThis section proves the standard derivation of product demand under monopolistic competition, integrating utility maximization and expenditure constraints, based on the Armington and Dixit-Stiglitz frameworks. ‘a graph on a laptop screen’ Image created by HackerNoon AI Image ...
17.2.3 Monopolistic versus Perfect Competition In this section, we will compare the long-run outcomes of monopolistically competitive markets with competitive markets. We already examined long-run equilibrium in a competitive market in Chapter 14. The two key differences between long-run equilibrium in...
In monopolistic competition, firms can earn an economic profit in A. the short run but not in the long run. B. the short run and in the long run. C. the long run but not in the short run. D. neither the long run nor the short run....
price competition 2. Product differentiation where the goods that are sold aren’t homogenous 1. Many sellers that do not take into account rivals’ reactions 4. Ease of entry of new firms in the long run because there are no significant barriers to entry ...