Price and output decisions in Monopolistic Competition
Illustrates the price and output decisions in Monopolistic Competition?
Expert
Under Monopolistic Competition the price and output decisions:
Short run period
Under short run, each existing firm is a monopolist containing a downward sloping demand curve for product of it. In order to reduce its profit the firm will produce which level of output at which MC=MR when price is more than MR, here it will be abnormal profit.
Long –Run Period
In the long period, normal profits will vanish. Latest firms will enter the industry and following expansion of output will reduce the price and only normal profit is made by the firms. Only while Average Cost (AC) equals the Average Revenue (AR), the Profit is normal. Then the equilibrium output will be at AC and MC=MR.
The income effect of a small change within the wage rate for that worker most strongly exceeds the substitution effect at a wage rate of: (1) $5 per hour. (2) $10 per hour. (3) $10 per hour to $25 per hour. (4) $25 pe
What are the types of business cycle?
Explain the infinitely elastic demand.
As per most conventional theories of the labor market, the: (w) supply curve of labor is positively sloped since higher wages attract additional workers in the labor market. (x) firms should contend with increasing returns from additional employment.
In what condition the concept of marginal costing basically applied?
Refer to figure as sketched below. Why is the total revenue curve a ray from the origin: w) since revenue increases at an increasing rate. x) since revenue increases at a decreasing rate. y) since the firm can sell its product at a constant price. z) since the firm sh
Screening devices used while employers try to stop adverse selection through applicants for positions do not comprise: (1) reviewing résumés to identify applicants’ qualifications. (2) needing non-compete clauses which prevent new
A government-supported literacy program provided from a firm which primarily employs unskilled labor is an illustration of an investment in: (1) human capital depreciation. (2) business paternalism. (3) specific training. (4) laissez-faire economics.
When the substitution effect of a higher wage rate is more powerful than the income effect, in that case the: (1) supply curve of labor will be positively sloped. (2) demand for leisure increases as income rises. (3) human capital eff
What did professor Hidbon illustrates about Demand?
18,76,764
1928932 Asked
3,689
Active Tutors
1430965
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!