1) Suppose that at the profit maximizing level of output for a monopolistically

Question

1) Suppose that at the profit maximizing level of output for a monopolistically competitive firm, the price of a good is $10 and the average total cost is $8. Based on this information, the firm is operating in theand we can expect O a) short-run; firms to exit the market b) short-run; firms to enter the market c) long-run; firms to exit the market O d) long-run; firms to enter the market Submit You currently have 0 submisslons for this question. Only 10 submisslon are allowed. You can make 10 more submissions for this question. Survey Question) 2) Please provide your rationale for your answer to the previous question. Submit You currently have 0 submlsslons for this question. Only 10 submission are allowed. You can make 10 more submissions for this question. 3) Which of the following is most likely a monopolistically competitive market? a) Lobsters O b) Blue jeans c) Segway scooters O d) Commercial aircraft Submit You currently have 0 submissions for this question. Only 10 submission are allowed. You can make 10 more submlssions for this question.

Explanation / Answer

As per Chegg guidelines, we are required to answer ony first question however I will try to answer each and every question.

Ans 1. (b)

Ans 2. This is because price is greater than AC in the short run. Thus, firm is making profits, so new firms will enter in the industry.

Ans 3. (d) Commercial aircraft

Ans 4. This is because, very less producers are available in the market and entry is very difficult because of high capital investment.

Ans 5. (d) Cannot calculate

Ans 6. We can only calculate the total revenue which will be 5x100 = $500 in this case. We need information regarding the total cost, only then we can calculate the total profit which is the difference between total revenue and total cost.

Ans 7. (b)

Ans 8. They set their own prices.

Ans 9. (d)

Ans 10. As the existing casinos are earning profits, new casions will enter in the market and offer attractive lottery schemes at lower prices which increases the competition between other casinos and eliminates the total profit in the industry.

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