Show the possible effect of this free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph.DemandDemandQUANTITY (Bikes)Which of the following statements are true about both monopolistic competition and monopolies? Check all that apply.Firms can earn positive profit in the long run.Firms earn zero profit in the long run.O Price is above marginal cost.Firms are not price takers.PRICE (Dollars per bike) Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demandcurve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC).Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitivecompany. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss.500450Monopolistically Competitive Outcome400350ATC300Profit or Loss250200150100MC50MRDemand50100150200250300350400450500QUANTITY (Bikes)Given the profit-maximizing choice of output and price, the shop is makingprofit, which means there areshops in the industry relative to the long-run equilibrium.Now consider the long run in which bike manufacturers are free to enter and exit the market.PRICE (Dollars per bike)

Show the possible effect of this free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. Demand Demand QUANTITY (Bikes) Which of the following statements are true about both monopolistic competition and monopolies? Check all that apply. O Firms can earn positive profit in the long run. O Firms earn zero profit in the long run. O Price is above marginal cost. O Firms are not price takers. PRICE (Dollars per bike)

Show the possible effect of this free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. Demand Demand QUANTITY (Bikes) Which of the following statements are true about both monopolistic competition and monopolies? Check all that apply. O Firms can earn positive profit in the long run. O Firms earn zero profit in the long run. O Price is above marginal cost. O Firms are not price takers. PRICE (Dollars per bike)

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 5SQ

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Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss.
Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. PRICE (Dollars per bike) 81°F Sunny 500 450 400 350 300 250 200 150 100 50 0 MC 50 100 150 MR ATC 200 250 300 350 400 Demand 450 500 Monopolistically Competitive Outcome Profit or Loss ?
Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. PRICE (Dollars per bike) 500 450 400 350 300 250 200 100 50 MC 0 0 ATC MR Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes) Given the profit-maximizing choice of output and price, the shop is earning shops in the industry than in long-run equilibrium. Monopolistically Competitive Outcome Profit or Loss ? profit, which means there are Now consider the long run in which bike manufacturers are free to enter and exit the market. Using your results from above, show the…
Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. Given the profit-maximizing choice of output and price, the shop is making(zero,positive,neative) profit, which means there are(an equal number of, fewer,more) shops in the industry relative to the long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. Which of the following statements are true about both monopolistic competition and monopolies? Check all that apply. Firms are not price takers. Price…
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