Question

16) Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is...

16) Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is

a) more elastic because there are many close substitutes for the product of a monopolistically competitive firm.

b) less elastic because monopolistically competitive firms produce similar, but not identical, products.

c) just as elastic because there are many sellers in both markets.

d) more elastic because in the long run, the demand curve is tangent to the firm's average total cost curve.

Homework Answers

Answer #1

Option B

  • Perfectly competitive firms are those firms who sell goods that are close substitutes of each other.
  • While monopolistically competitive firm are those firms who sells similar but not identical goods.
  • Due to many close substitutes,a perfectly competitive firms demand curve is highly elastic.
  • Due to very few substitutes as compared to perfectly competitive firms, monopolistically competitive firms are less elastic than the demand curve facing a perfectly competitive firm.
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The demand curve facing a firm will be more elastic, a. the fewer the number of...
The demand curve facing a firm will be more elastic, a. the fewer the number of competing firms b. the more differentiated the product c. the more substitutes there are for its product d. the greater the firm's ability to control price Because of easy entry, monopolistically competitive firms will             a.         produce at the lowest ATC.             b.         charge a price equal to MC.             c.         earn an economic profit equal to zero in the long run.             d.        ...
8. The demand curve of a monopolistically competitive firm is _______ elastic than the demand curve...
8. The demand curve of a monopolistically competitive firm is _______ elastic than the demand curve of a monopoly because the monopolistically competitive firm _______. Group of answer choices more, has competitors more, is a price maker more, is monitored more closely by the government less, only a few competitors less, exists in an environment without good information 10. Which of the following is not correct for a perfectly competitive firm? Group of answer choices price equals marginal revenue average...
A monopolistically competitive firm's demand curve is less elastic then a ______ firm's demand curve, but...
A monopolistically competitive firm's demand curve is less elastic then a ______ firm's demand curve, but more elastic than a _______ demand curve.
Which of the following characterizes a perfectly competitive market? A downward-sloping demand curve facing the firm....
Which of the following characterizes a perfectly competitive market? A downward-sloping demand curve facing the firm. A selling price at the market-established equilibrium price. A few firms that compete by changing price. A horizontal demand curve for the market.
Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a perfectly competitive...
Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a perfectly competitive market in that in both markets, firms produce where price equals marginal cost. produce at the minimum point of their average total cost curves. break even. produce where price equals marginal revenue.
What is the defining characteristic of a monopolistically competitive firm? Select one: a. Monopolistically competitive firms...
What is the defining characteristic of a monopolistically competitive firm? Select one: a. Monopolistically competitive firms are price makers b. Differentiated product c. Monopolistically competitive firms do not make economic profits in the long run d. There are many small sellers in the market
As more firms enter a monopolistically competitive market, the firms already in the market will experience...
As more firms enter a monopolistically competitive market, the firms already in the market will experience changes. Which of the following is not one of the likely changes? The firm's customers will become more price-sensitive. The firm will have fewer customers. The firm's demand curve will shift to the left. The firm's demand curve will become less elastic. The firm's demand curve will flatten.
1. Compared with a perfectively competitive market a monopoly is inefficient because                    a. it raises...
1. Compared with a perfectively competitive market a monopoly is inefficient because                    a. it raises the market price above marginal cost and produces a smaller output.             b. it produces a greater output but charges a lower price.             c. it produces the same quantity while charging a higher price.             d. all surplus goes to the producer.             e. it leads to a smaller producer surplus but greater consumer surplus. 2. The demand curve of a monopolist typically...
IN YOUR OWN WORDS PLEASE. 1. How does the demand curve faced by a monopolistically competitive...
IN YOUR OWN WORDS PLEASE. 1. How does the demand curve faced by a monopolistically competitive firm differ from that faced by a pure monopoly firm? 2. What happens to efficiency and capacity when monopolistically competitive firms produce where their ATC meets the demand curve? (Name and explain the specific concepts.)
A monopolistically competitive firm faces the inverse demand curve P = 100 – Q,and its marginal...
A monopolistically competitive firm faces the inverse demand curve P = 100 – Q,and its marginal cost is constant at $20. The firm is in long-run equilibrium. a.Graph the firm's demand curve, marginal revenue curve, and marginal cost curve. Also, identify the profit-maximizing price and quantity on your graph. b.What is the value of the firm's fixed costs? c.What is the equation for the firm's ATC curve? d.Add the ATC curve to your graph in part a please actually graph...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT