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Does marginal cost equal average total cost in monopolestically competitive firm in long run?
Wiki User
∙ 13y ago
No. Monopolistically competitive firms, by definition, invest in R&D to create product specialisation. R&D is a form of fixed-investment, so if the firm continually invests in R&D during all periods, then, in the long-run, AC cannot equal MC because FC/x will not approach 0 (assuming the firm constantly invests). If the firm ceases to invest at any point to remain specialised, then it will eventually approach MC = AC as x -> infinity in the long-run.
Wiki User
∙ 13y ago
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What is happening to average variable costs when they equal marginal costs?
When average variable costs equal to the average marginal cost, the average variable cost will be at the minimum point. i.e. lowest cost
How do you find selling price?
In a perfectly competitive market, it is equal to marginal cost, it is also the point of equilibrium.
Discuss equilibrium of a firm under monopoly what are the conditions of equilibrium?
when marginal revenue equal to marginal cost,when marginal cost curve cut marginal revenue curve from the below and when price is greter than average total cost
Perfectly competitive firm in long run equilibrium?
what about them? profits are 0 price=marginal cost all costs are variable optimal allocation of inputs is where marginal rate of technical substitution is equal to the price ratio of the inputs.
Price can be substituted for marginal revenue in the MR equal MC rule when an industry is purely competitive because price?
Is constant regardless of the quantity demanded.
What is happening to average variable costs when they equal marginal costs?
When average variable costs equal to the average marginal cost, the average variable cost will be at the minimum point. i.e. lowest cost
How do you find selling price?
In a perfectly competitive market, it is equal to marginal cost, it is also the point of equilibrium.
Are marginal revenue average revenue and price are all equal for a monopolist?
No, in a monopolistic market, marginal revenue is less than average revenue and price. This is because the monopolist must lower the price in order to sell more units, leading to a decline in revenue per unit.
Does supply equal marginal cost?
Not that I know of. Average cost does - in the form of a labour market
Discuss equilibrium of a firm under monopoly what are the conditions of equilibrium?
when marginal revenue equal to marginal cost,when marginal cost curve cut marginal revenue curve from the below and when price is greter than average total cost
Perfectly competitive firm in long run equilibrium?
what about them? profits are 0 price=marginal cost all costs are variable optimal allocation of inputs is where marginal rate of technical substitution is equal to the price ratio of the inputs.
Price can be substituted for marginal revenue in the MR equal MC rule when an industry is purely competitive because price?
Is constant regardless of the quantity demanded.
When marginal revenue equal to marginal cost?
At this intersection point on a graph, firms will earn maximum profit, even if this point is under average total cost.
A monopolist will set its production at a level where marginal cost is equal to?
A monopolist will set production at a level where marginal cost is equal to marginal revenue.
Draw a diagram with marginal product and average productExplain the relationship between marginal product and average product?
Marginal product is any input in the production process is the increase in the quantity of output obtained from on additional unit of the input. Average product is the output produced when one more unit of the variable factor is employed The relationship is state as: If labour's marginal product is exceed its average product that means labour's average product will be rising. Labour's average product will be falling. If labour's marginal product is less than its average product. If labour's marginal product is equal its average product and the average product will reach the minimum value at the point.
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 happening to average total costs when they equal marginal cost?
That is were u now got your total cost
