the remaining firms will return to normal profitability. Hence, the long-run equilibrium for monopolistic competition exists whenmarket price = average total cost, where marginal revenue = marginal cost, as shown in the diagram below. Remember, in economics, theaverage total cost ...
Short-Run and Long-Run Monopolistic Competition Diagram (Source:Economicshelp.org) Monopolistic Competition vs. Perfect Competition vs. Monopoly Perfect Competition: In a perfectly competitive market, each company possesses such minimal market share that no individual seller can influence the industry-wide...
Total profit is represented by the cyan-colored rectangle in the diagram above. It is determined by the equilibrium output multiplied by the difference between AR and theaverage total cost (ATC). Companies in monopolistic competition determine their price and output decisions in the short run, just...
Pure CompetitionPure Competition: Long-Run EquilibriumPure MonopolyPure Monopoly: Demand, Revenue and Costs, Price Determination, Profit Maximization and Loss MinimizationPrice DiscriminationPure Monopoly: Economic EffectsMonopoly RegulationMonopolistic CompetitionMonopolistic Competition: Short-Run Profits and Losses...
How does a short run profitable monopolistic competitive firm move into long-run equilibrium dropping its profit to zero? Explain and illustrate on a diagram. Explain Short run and Long Run equilibrium of monopolistic competition firm. Draw a graph, showing a firm in lon...
(y) y $/output unit The firm’s long-run supply curve Product Differentiation Among Gas Stations AC MC D MR PM QM SHORT RUN DIAGRAM AC D’ D LONG RUN DIAGRAM P Q MC MR Figure 10.7 Long-run equilibrium in monopolistic competition 影带出租的需求估计为: P = 10 - 0.004Q, (Q = 每周...
Short-Run Monopolistic Competition Equilibrium without Trade The short- run equilibrium under monopolistic competition is the same as a monopoly equilibrium. The firm chooses to produce the quantity Q 0 at which the firm’s marginal revenue, mr 0 , equals its marginal cost, MC. The...
Describe the Perfect Competition Firm's Demand Curve and explain why it's that shape. Could you explain short run equilibrium of firm under monopoly? List the three key attributes of monopolistic competition. Draw and explain a ...
Next: Monopolistic Competition: Short-Run Profits and Losses, and Long-Run EquilibriumAs can be seen in this diagram, advertising will increase costs, shifting the ATC curve from ATC1 up to ATC2, but average costs may be lower if the advertising allows the firm to sell enough quantity so ...
How are prices determined under perfect competition? Why was the dependence of the American economy on a small number of industries an underlying cause of the Great Depression? How does a change in exchange rates affect an economy? Using the Keynesian AD/AS diagram, explain why an ...