Question

Suppose the market for personal computers in country A is monopolistically competitive. Country A exports as...

Suppose the market for personal computers in country A is monopolistically competitive. Country A exports as well
as imports personal computers from the rest of the world. After full adjustment to the opening of trade, a firm in this industry which enjoys scale economies will:

A. receive a higher price for its product.
B. receive a lower price for its product.
C. enjoy a greater market share.
D. ultimately go out of business.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The correct option is B). receive a lower price for its product.

Monopolistic competition is a market structure that combines elements of monopoly and competitive markets. Essentially a monopolistic competitive market is one with freedom of entry and exit, but firms can differentiate their products. Therefore, they have an inelastic demand curve and so they can set prices. However, because there is freedom of entry, supernormal profits will encourage more firms to enter the market leading to normal profits in the long term.

Dear student, please vote thumbs up.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The automobile industry is an example of a(n): a. monopolistically competitive market because firms in the...
The automobile industry is an example of a(n): a. monopolistically competitive market because firms in the automobile industry face an upward-sloping demand curve. b. monopolistically competitive market for legal reasons. c. oligopoly for legal reasons. d. monopolistically competitive market because it experiences economies of scale. e. oligopoly because each firm must produce a large amount of output before it can achieve low average costs.
Question 311 pts When a country exports raw goods at a low price, and imports refined...
Question 311 pts When a country exports raw goods at a low price, and imports refined goods at a high price, this is known as: Group of answer choices Vertical trade. Export commodity concentration. Dual economy. Trade partner concentration. Flag this Question Question 321 pts Saudi Arabia's economy suffers significantly when the price of oil crashes on the world market. This is an example of Group of answer choices A dual economy Export commodity concentration Economies of scale Trade partner...
Which of the following is most likely produced in a monopolistically competitive market? a. Automobiles b....
Which of the following is most likely produced in a monopolistically competitive market? a. Automobiles b. Wheat c. Oil d. Fast food e. Soybeans Oligopolists are more sensitive to the pricing and output policies of their rivals when: a. there are many firms in the industry. b. all firms produce identical products. c. there are barriers to entry. d. there is freedom of entry and exit. e. their products are highly differentiated. It is harder to explain the behavior of...
Question 1: While the U.S. both imports and exports computers, we import a much larger amount...
Question 1: While the U.S. both imports and exports computers, we import a much larger amount than we export. For this question, assume that the U.S. either imports completely or exports completely and that the trade balance reflects something fundamental about our resources and production costs relative to the rest of the world. Use a detailed diagram to show supply and demand in the market for computers in U.S. Label all areas in the graph in order to answer the...
33.If a firm has diseconomies of scale a.If it is in a very competitive industry it...
33.If a firm has diseconomies of scale a.If it is in a very competitive industry it would be advisable for it to scale back its production level in the long run b.Average total cost is rising as the firm expands c.Both a and b d.Neither a nor b 34.In a perfectly competitive industry a.Firms produce differentiated “ heterogeneous” products b.Legal barriers to entry prevent the market from being monopolized c.Firms must get a patient before producing the product d.None of...
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...
Suppose there are 1000 firms in the perfectly competitive shrimp industry. All firms are operating at...
Suppose there are 1000 firms in the perfectly competitive shrimp industry. All firms are operating at their most efficient scale (i.e., they have expanded to take advantage of any economies of scale). All firms have the same technology and costs. All firms are producing the quantity that maximizes profit. Each firm produces 3000 pounds of shrimp a year and has average total cost (ATC) of $13 per pound. The market price of shrimp the firms receive is $10 per pound....
1.A policy by which a government offers temporary protection to a domestic industry as it adjusts...
1.A policy by which a government offers temporary protection to a domestic industry as it adjusts to increased competition from imports is a(n): A.import-resistance policy. B.infant industry policy. C.protectionist policy. D.safeguard policy. 2.An export subsidy usually: A.discourages domestic buyers from importing substitute products at lower prices than the subsidized domestic product. B.lowers the price paid for a product by foreign buyers relative to the price that domestic consumers pay for the subsidized product. C.increases the world price of the product,...
Consider the daily market for bananas in Australia: Demand: P = 100 – 5Qd Supply: P...
Consider the daily market for bananas in Australia: Demand: P = 100 – 5Qd Supply: P = 10 + 10Qs where quantity (Q) is measured in 1000 tons (for example, Q = 2 means Q = 2K tons, where K stands for 1000) and price (P) is price per ton, and the superscripts d and s stand for ‘demand’ and ‘supply’ respectively. The Equilibrium Price =     _____________ The Equilibrium Quantity = ___________ In the problem above, Australian government does...
From the data given below, answer the following questions Personal consumption expenditure $4627 Net interest $400...
From the data given below, answer the following questions Personal consumption expenditure $4627 Net interest $400 Exports $716 Government Purchases of goods and services $1175 Corporation Profits $536 Imports $818 Net taxes $1260 Personal income taxes $1300 Rental income $28 Depreciation $716 Gross private domestic investment $1037 Indirect taxes $970 Proprietor’s income $473 Subsidies $391 Compensation of employees (wages) $4005 Price level (GDP deflator) $120 a. What is the value of net export NX? b. Is the country borrowing from...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT