This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A firm in monopolistic competition maximizes its profit by producing where its price is equal to its ... (Read 86 times)

bclement10

  • Hero Member
  • *****
  • Posts: 560
on: Jun 29, 2018
A firm in monopolistic competition maximizes its profit by producing where its price is equal to its marginal cost. Is the previous statement correct or incorrect?
 
  What will be an ideal response?

Question 2

A perfectly competitive firm is called a price maker because all the firms together must make the market price. Is the previous statement correct or incorrect? Briefly explain your answer.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mistyjohnson

  • Sr. Member
  • ****
  • Posts: 331
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is incorrect. A firm in monopolistic competition maximizes its profit by producing where its marginal revenue equals its marginal cost. Because the marginal revenue is less than the price for a firm in monopolistic competition, it definitely is not the case that the firm produces where its price equals its marginal cost

Answer to Question 2

The statement is false. A perfectly competitive firm is called a price taker because the firm must take whatever price the market determines. Any single firm's actions cannot affect the market price.


bclement10

  • Member
  • Posts: 560
Reply 2 on: Jun 29, 2018
Gracias!

at

  • Member
  • Posts: 359
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

The word drug comes from the Dutch word droog (meaning "dry"). For centuries, most drugs came from dried plants, hence the name.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

Immunoglobulin injections may give short-term protection against, or reduce severity of certain diseases. They help people who have an inherited problem making their own antibodies, or those who are having certain types of cancer treatments.

Did you know?

If you could remove all of your skin, it would weigh up to 5 pounds.

Did you know?

The National Institutes of Health have supported research into acupuncture. This has shown that acupuncture significantly reduced pain associated with osteoarthritis of the knee, when used as a complement to conventional therapies.

A subdural hematoma. A meningeal vein is ruptured and blood has accumulated in the subdural space, p A subdural hematoma. A meningeal vein is ruptured and blood has accumulated in the subdural space, p
Retrograde pyelogram. A contrast medium is injected into the ureter using a cystoscope, and the X-ra Retrograde pyelogram. A contrast medium is injected into the ureter using a cystoscope, and the X-ra
Alexander Fleming photographed in his lab where he observed the natural competition between a fungus Alexander Fleming photographed in his lab where he observed the natural competition between a fungus
Richard Wrangham’s “female-bonded” theory of intergroup competition was highly influential in our un Richard Wrangham’s “female-bonded” theory of intergroup competition was highly influential in our un
How to create a price index to calculate inflation for a basket of goods How to create a price index to calculate inflation for a basket of goods
Real Price of Oil, 1861–2010 Real Price of Oil, 1861–2010
Video: Energy inputs and release in glycolysis Animation

For a complete list of videos, visit our video library