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No because it does not produce at minimum average total cost
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In general monopolistically competitive frims earn profits?
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
Should a monopolistically competitive firm take into account it's fixed costs when deciding how much to produce?
No. A monopolistically competitive firm should produce up to the point where marginal revenue equals marginal cost.
A firm in a monopolistically competitive market is similar to a monopolist in the sense that it?
faces a downward-sloping demand curve
What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?
Consumers will substitute with a rival's product.
What happens to a monopolistically competitive firm that begins to charge an excessive price for it's product?
Consumers will substitute a rival's product.
In general monopolistically competitive frims earn profits?
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
Should a monopolistically competitive firm take into account it's fixed costs when deciding how much to produce?
No. A monopolistically competitive firm should produce up to the point where marginal revenue equals marginal cost.
A firm in a monopolistically competitive market is similar to a monopolist in the sense that it?
faces a downward-sloping demand curve
What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?
Consumers will substitute with a rival's product.
What happens to a monopolistically competitive firm that begins to charge an excessive price for its products?
Consumers will substitute with a rival's product.
What happens to monopolistically competitive firm that begins to charge an excessive price for its product?
Consumers will substitute with a rival's product.
What happens to a monopolistically competitive firm that begins to charge an excessive price for it's product?
Consumers will substitute a rival's product.
Why is the demand curve facing a monopolist less elastic than one facing a firm that operates in a monopolistically competitive market?
In a monopoly, the monopolist company is the only product in the market place. However, a company competing in a monopolistically competitive market has multiple "similar" competitors that all try and differentiate themselves with specialized or additional services; i.e. the Italian restaurant serving food only from northern Italy. These companies may be a monopoly in the sense that their niche product is one-of-a-kind, but there are substitute products that can replace them if their price becomes too high to the consumer. As a result, the firm in a monopolistically competitive has a more elastic demand than a true monopolist.
How does a monopolistically competitive firm determine its profit-maximizing price?
price = marginal revenue. marginal revenue > average revenue. price > marginal cost. total revenue > marginal co
Why is it that firms can earn profits in the long run in monopoly and oligopoly but not in monopolistic competition and perfect competition?
Because monopolistically competitive firms have an optimal production allocation at monopoly values: marginal revenue = marginal cost, marking-up to the demand function. When competition is not perfect, marginal revenue does not equal demand but is always below it on a Cartesian plane, so the optimal production value of a monopolistically competitive firm is both less and at a higher price than a perfectly competitive one.
What is one market trend that results when a monopolistically competitive firm starts earning profits well above its costs?
Fierce competition would encourage rivals to create new ways to differentiate their products and lure customers to them.
One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where -?
perfectly competitive industry become a monopoly， what changes
