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Why is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?
How can a monopolistic competitor tell whether the price it is charging will cause the firm to earn profits or experience losses?
How is the perceived demand curve for a monopolistically competitive firm different from perceived demand curve for a monopoly or a perfectly competitive firm?
As those firms capture the original firm's profit, what will happen to the original firm's profit-maximizing price and output levels?
How will that affect the price advertising campaign charges and the quantity it supplies?
Draw a monopolist's demand curve, marginal revenue, and marginal cost curves. Identify the monopolist's profit-maximizing output level.
If a monopoly firm is earning profits, how much would you expect these profits to be diminished by entry in the long run?
Before you go ahead and challenge the monopolist, what possibility should you consider for how the monopolist might react?
In a global market, where U.S. firms compete with firms from other countries, would this policy make the same sense as it might in a purely domestic context?
ALCOA does not have the monopoly power it once had. How do you suppose their barriers to entry were weakened?
How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive firm?
When a monopolist identifies its profit-maximizing quantity of output, how does it decide what price to charge?
How can a monopolist identify the profit maximizing level of output if it knows its marginal revenue and marginal costs?
How can a monopolist identify the profit maximizing level of output if it knows its total revenue and total cost curves?
How does the demand curve perceived by a monopolist compare with the market demand curve?
How is the demand curve perceived by a perfectly competitive firm different from the demand curve perceived by a monopolist?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
Suppose demand for a monopoly's product falls so that its profit-maximizing price is below average variable cost. How much output should the firm supply?
If the firms in a monopolistically competitive market are earning economic profits or losses. Would you expect them to continue doing so in the long run? Why?
Perfectly competitive firm Doggies Paradise Inc. sells winter coats for dogs. Dog coats sell for $72 each. What is the profit maximizing quantity?
The AAA Aquarium Co. sells aquariums for $20 each. Fixed costs of production are $20. What is the profit-maximizing quantity of output?
How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect the long-run average cost curve of a firm?
A firm is considering an investment that will earn a 6% rate of return. Should the firm make the investment? Show your work.
Compute the average total cost, average variable cost, and marginal cost of producing 60 and 72 haircuts.
If hiring labor for the winter costs $100/unit and a unit of capital costs $400, what production method should be chosen?