ECON 260 1000 900 800 700 600 500 400 300 200 100 ATC 5 10 15 20 25 30 35 40 Qua
ID: 1114830 • Letter: E
Question
ECON 260 1000 900 800 700 600 500 400 300 200 100 ATC 5 10 15 20 25 30 35 40 Quantity 34 Refer to Figure#4. This figure depicts a situation in a monopolistically competitive market. In short run, what price will the monopolistically competitive firm charge in this market? a. $300. b. $400 c. $500. d. $600. 35. Refer to Figure#4. At the profit-maximizing, or loss-minimizing, output level, the firm in this figure has total costs of approximatel a. $2,000. b. $3,000. c. $4,000. d. $5,000 36 Refer to Figure #4. Assume the firm in the figure is currently producing 8 units of output and charging S400. The firm a. will increase its profits if it raises its price and reduces its production level. b. will increase its profits if it lowers its price and expands its production level. c. is maximizing profits. d. will increase its profits if it raises its prices and expands its production level 37. Which of the following best describes the idea of excess capacity in monopolistic competition? a. Firms produce more output than is socially desirable. b. Due to product differentiation, firms choose output levels where P> ATC c. Firms keep some surplus output on hand in case there is a shift in the demand for their product. d. The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve. 38. Refer to Figure#5 Thsfigure depicts a situation in a monopolistically competitive market. How much consumer surplus will b derived from the purchase of this product at the monopolistically competitive price? a. $200.00. b. $312.50. c.S400.00. d.$800.00 39 Refer to Figure#5. This figure depicts as tuationm a monopolistically competitive market. How much profit will the monopolistically competitive firm earn in this situation? a. A S10 profit. d. No profit, since monopolistically competitive firms never earn economic profit b. A $20 profit. c. A $200 profit.Explanation / Answer
34.
The monopolistically competitive firm profit-maximising condition are ;
MR=MC,
Hence the firm will produce 10 unit of output and price will be determined by the corresponding vertical line on the quantity 10 units on the demand curve.
hence price charged will be $600 per units,
hence option d is the correct answer,
35.
The total cost at profit-maximising quantity are= ATC*Q
= 500*10
=$5,000
hence option d is the correct answer,
36.
If the firm is currently producing at 8 units and charging price $400 per unit. It means firm is producing below the profitmaximing level of price and output. In this situation, firm should raise the price and increase the production level, so that firm could reach the profit-maxing level of output and price.
hence option d is the correct answer.
37.
The excess capacity output is a circumstance in which actual production is below the efficient level of output.
Hence the excess capacity output will arise in the monopolistically competitive firm when the output produced by the typical firm is less than what would occur at the minimum point on its ATC curve.
Therefore option d is the correct answer.
# according to chegg guidelines i have solved firstfour-partt.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.