6. (Figure: Market Demand Curve I) The graph shows the market demand curve. Price ($) 40- 36 32 28 24 20 16 12 8 4 0 MR MC=AC 1234 5 6 7 8 9 10 Quantity b. Bertrand competition with identical goods c. Cournot duopoly with identical goods What are the equilibrium price and market output under the following market structures? a. a two-firm cartel

6. (Figure: Market Demand Curve I) The graph shows the market demand curve. Price ($) 40- 36 32 28 24 20 16 12 8 4 0 MR MC=AC 1234 5 6 7 8 9 10 Quantity b. Bertrand competition with identical goods c. Cournot duopoly with identical goods What are the equilibrium price and market output under the following market structures? a. a two-firm cartel

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 3PA

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Similar questions

Suppose that, due to a successful advertising campaign, a monopolistic competitor experiences an increase in demand for its product. How will that affect the price it charges and the quantity it supplies?
Make a case for why monopolistically competitive industries never reach long-run equilibrium.
What is the relationship between product differentiation and monopolistic competition?
5. Monopoly outcome versus competition outcome Consider the weekly market for gyros in a popular neighborhood close to campus. Suppose this market is operating in long-run competitive equilibrium with many gyro vendors in the neighborhood, each offering basically the same gyros. Due to the structure of the market, the vendors act as price takers and each individual vendor has no market power. The following graph displays the supply (SMC) and demand (D) curves in the weekly market for gyros. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition. PRICE (Dollars per gyro) 5.0 4.5 4.0 3.5 3.0 2.5 Competitive Market 2.0 S=MC 1.5 1.0 0.5 D 0 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Gyros) PC Outcome ? Now assume that one of the gyro vendors successfully petitions the neighborhood development board to obtain exclusive rights to sell gyros in the neighborhood. This firm buys up all the rest of the gyro food trucks…
5. Cartel versus competitive outcome A few rival firms provide cell phone services in the United States. Because the firms must have the appropriate technology, cell phone towers, equipment, and customer service to maintain their businesses, there are economies of scale. The market for cell phone services is best characterized as The following graph shows the market demand conditions and long-run costs of production for individual firms in the market for cell phone services. Assume all cell phone companies produce an identical product and face identical cost curves. Suppose all cell phone companies successfully coordinate supply decisions to maximize profit as a cartel. Place the green point (triangle symbol) on the graph to indicate the quantity of monthly contracts the cartel will supply and the price it will charge. Dashed drop lines will automatically extend to both axes. PRICE (Dollars per contract) 50 40 30 20 10 0 0 MR LRATC Now suppose that some cartel members Demand 200 400…
2. "The competition commission investigated the high data prices in South Africa in 2017. The report, which was presented two years later, found that the data services market is "highly concentrated" with a duopoly of the leading cell phone operators - MTN and Vodacom".Based on the paragraph given above, which of the statements is CORRECT?A. Highly concentrated market benefits consumers as they have many, many choices available to them.B. Highly concentrated market restricts consumer welfareC. Highly concentrated market is an excellent reason for government to reduce regulationD. Highly concentrated market increases consumer welfare
5. Monopoly outcome versus competition outcome Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply (S = MC) curves in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition.
5. Monopoly outcome versus competition outcome Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium, with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply curves (S = MC) in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition. Use the green point (triangle symbol) to shade the area that represents consumer surplus, and use the purple point (diamond symbol) to shade the area that represents producer surplus. PRICE (Dollars per hot dog) 5.0 4.5 PRICE (Dollars per hot dog) 4.0 3.5 3.0 2.5 1.0 0.5 0 5.0 Show Transcribed Text 4.5 4.0 3.5 3.0 0 20 1.0 0.5 40 Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs…
8. From the following graph, show the equilibriums under each scenario. Market is in equilibrium at A under competitive market. (a) Show the equilibrium under monopoly. Call this point B (b) When the demand increased in the area due to immigration, show the new competitive equilibrium, call this point C. (c) Show the new monopolistic equilibrium with increased demand and call this point D. P'. P MR D. MR, Q. Q', Quantity Price
5. Monopoly outcome versus competition outcome Consider the weekly market for gyros in a popular neighborhood close to campus. Suppose this market is operating in long-run competitive equilibrium with many gyro vendors in the neighborhood, each offering basically the same gyros. Due to the structure of the market, the vendors act as price takers and each individual vendor has no market power. The following graph displays the supply (S = MC) and demand (D) curves in the weekly market for gyros. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition. PRICE (Dollars per gyro) 5.0 4.5 1.0 0.5 0 0 Competitive Market 1:20 180 200 S-MC QUANTITY (Gyros) D 280 3:20 380 400 + PC Outcome Now assume that one of the gyro vendors successfully petitions the neighborhood development board to obtain exclusive rights to sell gyros in the neighborhood. This firm buys up all the rest of the gyro food trucks in the area and begins to…
(Figure: Market Demand Curve I) The graph shows the market demand curve. Price (S) 40 35 2 28 24 20 16 12 36 32- 8 4- D 8 9 10 Quantity The equilibrium price in a Cournot duopoly with identical goods is $ a.8. b. 12 c.24 O d. 18.64 0 MC=AC MR 1 2 3 4 5 6 7
The task to complete is to create a market scenario for a branded handbag. (You can google handbags and come up with hundreds!): Name the company and describe one of its "signature" handbags. - Draw the monopolistic competition market model for that company showing a profit. 1. Do you think that the United State's economic system is best described by a perfectly competitive dynamic or best described by a monopoly dynamic where there are forces that exclude entry into markets or by a monopolistic competition dynamic with some power to exclude entry but mainly a market of differentiation?