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3 years ago

Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will:

Business

1 answer:

forsale [732]3 years ago

6 0

Answer:

attract other firms to enter the industry, causing the existing firms' profits to shrink.

Explanation:

Monopolistic competition can be defined as an imperfect competition where many producers or organizations sell differentiated products that are not perfect substitutes. Examples of firms or organizations engaging in a monopolistic competition are restaurants, shoes, clothing lines etc.

Generally, a monopolistic competitive market is characterized by the presence of large numbers of firm (producers) and a very low entry barrier.

Hence, in a monopolistic competition, firms have a degree of control over price, make independent decisions and can freely enter or exit the market in the long-run. Therefore, these firms combine elements of both monopoly and competition.

When a monopolistically competitive firm is in long-run equilibrium marginal revenue is equal to marginal cost (MR = MC) . This ultimately implies that in the long-run, firms engaging in monopolistic competitive market are often going to manufacture the quantity of goods where the marginal cost (MC) curve intersect with the marginal revenue (MR). Also, the price set would be greater than the minimum average total cost (ATC).

Hence, assuming that in a monopolistically competitive industry, firms are earning economic profit. This situation will attract other firms to enter the industry, causing the existing firms' profits to shrink.

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The answer is 20%, 40 is 1/5 of 200, therefore it is 20%

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3 years ago

During the first year of operations, employees earned vacation pay of $35,000. The vacations will be taken during the second yea

insens350 [35]

Answer:

False

Explanation:

In the given question it is mentioned that the employees earned vacation pay of $35,000 during the first year of the operation.

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3 years ago

Read 2 more answers

Four roommates are planning to spend the weekend in their dorm room watching old movies, and they are debating how many to watch

denis-greek [22]

Answer:

1. Inside the dorm room, the movies are Non-Rival which means that one person can watch the movie and it will not diminish the ability of others to watch as well.

Also as they are all in the same dorm, the showing of the movie is Non-Excludable as well because no one can stop the other from watching.

Public good is both Non-Rival and Non-Excludable so the showing of a movie IS a public good.

Musashi Sean Bob Eric Total Willingness to pay

10 9 8 3 30

8 7 6 2 23

6 5 4 1 16

4 3 2 0 9

2 1 0 0 3

The optimal number of movies that can be rented is dependent on their total willingness to pay. If their Total willingness to pay for the movie is above $8 which is the cost of a movie, then they will get it. From the table, the fifth movie is below the price of $8 so they should rent 4 movies.

3. If they rent 4 movies and there are 4 of them then the cost per person is;

= (8 *4)/4 people

= 24/4

= $8

This means that each roommate will pay $8.

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3 years ago

Whenever marginal cost is greater than average total cost, A. average total cost is rising. B. marginal cost is falling. C. aver

Damm [24]

Answer:

A. average total cost is rising.

Explanation:

Whenever marginal cost is more than average cost it means it costs more to produce a unit now compared to the average cost of the previous units. Lets assume that a company produces 3 units of a good.

The first unit costs $1

The second unit costs $2

The third unit costs $3.

The average cost is (1+2+3)/3=2

Now if the marginal cost for producing a unit is more than the average cost for example if the marginal cost is 4, then this will mean that average total cost is rising. we can mathematically check this.

The first unit costs $1

The second unit costs $2

The third unit costs $3.

The fourth unit costs $4

Average cost= (1+2+3+4)/4=10/4=2.5

Here we see that the average cost increased from 2 to 2.5 because marginal cost was greater than average cost.

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3 years ago

Although Martin is not in top management, he is charismatic and well liked by others in his organization. Other employees often

Bingel [31]

Answer:

Informal leadership

Explanation:

Informal leadership is an individual's ability to manipulate other people's behavior through means other than structured authority granted by the company across its rules and regulations.

Informal leadership is simply any kind of leadership that is not formally based.

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3 years ago