10.The firm will realize an economic of $360 oss $380 d) prost $320 11. In the s

Question

10.The firm will realize an economic of $360 oss $380 d) prost $320 11. In the short run a monopolisticaly competitive em's ecenomic prolts a) will always be zero b) are always positive c) will be maximized where P equal ATC d) may be positive or negatve a) many buyers c) many selers 12. In an olgopsonistic market there are few buyens none of the above 13. The steel company industry in the U.S would be desaribed by an ecooiat a) Pure monopoly 14. The monopolistic firm's demand curve: is perfectly elastic d) is less elastic than a purely competitive Sm's demand curve 15. The monopolstc's demand curve is: a) perfecty elastic e) of unit elasticity throughout d) identical with industry demand curve marginal cost c) oligopoly 16. Under which of the following market structures wil equilbrium price be equal e) none of the above

Explanation / Answer

11) In the short run, a monopolistically competitive firm maximizes profit or minimizes losses by producing that quantity that corresponds to when MR = MC . If average total cost is below the market price, then the firm will earn an economic profit . However, if the average total cost is above the market price, then the firm will incur losses, equal to the average total cost minus the market price multiplied by the quantity produced . Answer : d) maybe positive or negative .

12) In contrast to an oligopoly where there are many buyers and few sellers , in an oligopsonistic market there are few buyers and many sellers . Answer : d) few buyers .

13) Steel company industry in US : d) Oligopoly

14) The monopolistic firm's demand curve :  In case of a competitive firm, price is given and fixed. Demand or Average Revenue curve is perfectly flexible and is a horizontal straight line. A monopolist has the freedom to charge a higher or lower price. So it less elastic than demand curve of perfectly competitive firm . Answer : d) less elastic than a purely competitive firm's demand curve .

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