the price at which a monopolistically competitive firm sells its product: course hero

How do firms set prices in a monopolistically competitive industry?

Answer to 27. The price at which a monopolistically competitive firm sells its product:A. exceeds the marginal cost of production.B. produces economic profits

Is the seller of a product a monopolist?

Dec 13, 2018 · The firm will reach long-run equilibrium in a monopolistically competitive market when the long-run marginal cost curve crosses the marginal revenue curve where the long-run …

What is the output level of a monopolistic firm?

A monopolistically competitive firm chooses? A. the price of the product it sells but market forces determine the quantity it will be able to sell. B. both the quantity of output to produce …

Is a men's suit business monopolistically competitive?

A profit-maximizing firm in a monopolistically competitive market differs from a firm in a perfectly competitive market because the firm in the monopolistically competitive market. …

What is the difference between monopolistic competition and perfect competition?

The difference between monopolistic competition and perfect competition is that at long-run equilibrium, the perfectly competitive firm will be producing at optimum efficiency, while the monopolistically competitive firm will be producing at a less efficient point.

What is monopolistic competition?

Monopolistic competition is a market structure in which many firms, each with a low degree of market power, produce similar but differentiated products. These products are not perfect substitutes (replacements ...

Why is monopolistic competition inefficient?

Monopolistic competition provides diversity to consumers, but it is inefficient because it makes it difficult to take advantage of economies of large-scale production. At a firm's optimal output the price exceeds marginal cost, whereas in perfect competition the price is reduced to marginal cost.

What is the horizontal demand curve?

Therefore, firms in a perfectly competitive market face a horizontal demand curve, meaning the amount of demand stays the same no matter how much of a good is produced.

What is the demand curve in a perfectly competitive market?

Therefore, firms in a perfectly competitive market face a horizontal demand curve, meaning the amount of demand stays the same no matter how much of a good is produced. In an imperfectly competitive market, each firm faces a downward-sloping demand curve.

What is the downward sloping demand curve?

In an imperfectly competitive market, each firm faces a downward-sloping demand curve. The ability of firms to affect the market price of goods means the more of a good produced, the lower the price the good will be.

How does a firm reach long run equilibrium?

A firm reaches long-run equilibrium at the point where the long-run marginal cost equals the marginal revenue at a point corresponding to the quantity of output at which the long-run average cost curve touches the demand curve.

What is a monopolistically competitive industry?

monopolist. In a monopolistically competitive industry, firms set price. above marginal cost since each firm is a price setter. A profit-maximizing firm in a monopolistically competitive market differs from a firm in a perfectly competitive market because the firm in the monopolistically competitive market.

Why does a firm face a downward sloping demand curve?

A firm in a monopolistically competitive market faces a. downward-sloping demand curve because the firm's product is different from those offered by other firms. In the shop run, a firm in a monopolistically competitive market operate much like a. monopolist. In a monopolistically competitive industry, firms set price.

What is positive economic profit?

Positive economic profits for firms in the long run. If firms in a monopolistically competitive market are earning positive profits, then. new firms will enter the market. In monopolistically competitive markets, economic losses. suggest that some existing firms will exit the market.