« previous next »

Author Question: Automobile manufacturers produce a range of automobiles such as sports utility vehicles, luxury ... (Read 186 times)

Mollykgkg

  • Hero Member
  • *****
  • Posts: 529
on: Jun 29, 2018
Automobile manufacturers produce a range of automobiles such as sports utility vehicles, luxury sedans, pickup trucks, and compact cars. What fundamental economic question are they addressing by making this range of products?
 
  A) Who to produce automobiles for? B) How to produce goods that consumers want?
  C) What to produce? D) Why produce a variety of automobiles?

Question 2

Monopolistically competitive firms earn zero economic profit in the long run as do perfectly competitive firms. Does this mean that total surplus is maximized in a monopolistically competitive market?
 
  What will be an ideal response?
InMicro ¦ Hubbard, O'Brien ¦ 1st Edition
Buy Test-Bank


fatboyy09

  • Sr. Member
  • ****
  • Posts: 358
Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

No, total surplus is not maximized in a monopolistically competitive market. A monopolistic competitor has a certain degree of market power. The key is that there are potential sales that would increase total surplus that are not realized because the monopolistically competitive firm restricts quantity to keep price higher. So even though price is equal to average total cost, it is not equal to marginal cost.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

Mollykgkg

  • Hero Member
  • *****
  • Posts: 529
Reply #2 on: Jun 29, 2018
Thank you :)


fatboyy09

  • Sr. Member
  • ****
  • Posts: 358
Reply #3 on: Jun 29, 2018
Happy to help you


« previous next »
 

Did you know?

Glaucoma is a leading cause of blindness. As of yet, there is no cure. Everyone is at risk, and there may be no warning signs. It is six to eight times more common in African Americans than in whites. The best and most effective way to detect glaucoma is to receive a dilated eye examination.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

One way to reduce acid reflux is to lose two or three pounds. Most people lose weight in the belly area first when they increase exercise, meaning that heartburn can be reduced quickly by this method.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

Cheetah at the Werribee Open Range Zoo Cheetah at the Werribee Open Range Zoo
Range of Motion of the Wrist and Hand Joints, Radial and Ulnar Deviation of the Wrist Range of Motion of the Wrist and Hand Joints, Radial and Ulnar Deviation of the Wrist
Range of Motion of the Hip Joint, Position of the Leg for Full External Rotation Range of Motion of the Hip Joint, Position of the Leg for Full External Rotation
This red gasoline container holds about 30 gallons of gasoline and is used to fill vehicles used ... This red gasoline container holds about 30 gallons of gasoline and is used to fill vehicles used ...
Range of Motion at the Wrist. Range of Motion at the Wrist.
Video: Primate Evolutionary Tree Animation

For a complete list of videos, visit our video library