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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.
Under what circumstances will a monopolistically competitive firm's demand curve be least elastic?
A monopolistically competitive firm's demand curve will be least elastic when its products are unique and have few close substitutes, leading to less responsiveness to price changes by consumers.
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.
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.
Under what circumstances will a monopolistically competitive firm's demand curve be least elastic?
A monopolistically competitive firm's demand curve will be least elastic when its products are unique and have few close substitutes, leading to less responsiveness to price changes by consumers.
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.
If a monopolistically competitive firm is making profits, how is it able to maintain its competitive edge in the market?
A monopolistically competitive firm can maintain its competitive edge in the market by offering unique products or services that differentiate it from competitors, creating brand loyalty among customers, and effectively marketing its products to attract and retain customers. Additionally, the firm may also benefit from barriers to entry that prevent new competitors from easily entering the market.
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
What happens to a monopolistically competitive form that begins to charge an excessive price for its product?
When a monopolistically competitive firm charges an excessive price for its product, it risks losing customers to competitors offering similar products at lower prices. This price increase may lead to a decrease in demand, as consumers seek alternatives. In the long run, if the firm continues to maintain high prices without enhancing product quality or differentiation, it could see a decline in market share and profitability, ultimately prompting it to adjust its pricing strategy to remain competitive.
