ECON 102 Homework 5 Answer (Penn State University)

ECON 102 Homework 5 Answer (Penn State University) Question 1 Suppose that a monopolistically competitive firm must build a production facility in order to produce a product. The fixed cost of this facility is FC = $24. Also, the firm has constant marginal cost, MC = $3. Demand for the product that the firm produces is given by P = 27-3Q. Fill in the table below. Some numbers have been filled in for you. Hint: All answers that you fill in will be integers (no decimals). Be sure to just type the numbers and do not type in dollar signs. If you enter negative numbers, be sure to include a minus sign (-) to the left of the number. Another Hint: It may be best if you print out the table first and fill it in by hand and then type in your answers. Question 2 Enter just a number to answer this problem. How many units of output will the firm produce if maximizes its profit? Question 3 Enter just a number to answer this problem. What price should this firm charge if it wants to maximize its profit? Question 4 Monopolistic competition differs from perfect competition primarily because in monopolistic competition, Question 5 The demand facing a monopolistically competitive firm is ________ a monopoly firm and ________ a perfectly competitive firm. Question 6 If firms in a monopolistically competitive industry are earning economic profits, then in the long run Question 7 For a monopolistically competitive firm in long-run equilibrium, Question 8 We know that monopolistically competitive firms prevent the efficient use of resources because they produce where Question 9 When monopolistically competitive firms earn ________ economic profits, other firms ________ an industry in the long run. Question 10 Firms will ________ a monopolistically competitive market until ________ are eliminated. Question 11 When MR = MC and P = ATC for a monopolistically competitive firm, the firm is in Question 12 Refer to the graph above, which represents the demand and cost curves for Neat and Trim Barber Shop, a monopolistically competitive firm. The profit-maximizing number of haircuts for the Barber Shop is Question 13 Refer to the graph again. The profit-maximizing price of haircuts by Neat and Trim is Question 14 If Neat and Trim maximizes profits, it ________ of $80. Question 15 If Neat and Trim maximizes profits, its ________ equals $320. Question 16 If Neat and Trim maximizes profits, its ________ is $240. Question 17 Refer to the graph. From society's point of view, the efficient output level is ______ haircuts. Question 18 Refer to the graph again. Suppose that the profits or losses incurred by Neat and Trim are a reflection of the Barber Shop industry as a whole. In the Barber Shop industry, in the long run, Question 19 Suppose that two players are playing the following game. .... Question 38 The major distinguishing characteristic of oligopoly is that