Price‐searching behavior. The
monopolistically competitive firm will be a price‐searcher rather than a price‐taker because it faces a downward‐sloping demand curve for its product. The firm searches for the price that it will charge in the same way that a monopolist does, by comparing marginal revenue with marginal cost at each possible price along the market demand curve.
Updated on August 10, 2022 The monopolistically competitive seller’s demand curve will tend
to become more elastic the: more significant the barriers to entering an industry.
greater the
degree of product differentiation.
larger the
number of close competitors.
smaller the
number of sellers.
Answer
Ans: larger the number of close
competitors.
Explanation:
One of the major factor that
determines the elasticity of demand for a good is the availability
of close substitutes. If the number of substitutes are more, the
the demand for the good is elastic and if the number of substitutes
are less, the the demand for the good is less elastic. Thats why
the monopolistically competitive
seller’s demand curve will tend to
become more elastic the larger the number of close competitors.
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monopolistically competitive seller's demand curve will tend to become more elastic becausethere are more substitutes
A monopolistic competitor's marginal revenue curve is downward sloping and lies below thedemand curve.
The demand and marginal revenue curves of a monopolistic competitor are equal only at theirinitial points
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How do monopolistic competitors maximize profits?
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What happens in the short run and long run to monopolistic competitors' revenues?
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Mutual Interdependence arises in oligopoly because there are only a small number of firms inthe market. What is mutual interdependence?
40. In the long run, new firms will enter a monopolistically competitive industry:
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41.The following are demand and cost data for a specific firm:Refer to the above information. Suppose that entry into the industry changes this firm's demand schedule fromcolumns (1) and (3) to columns (2) and (3). Economic profit will:
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42. Since a firm in a monopolistically competitive market faces a:A. downward-sloping demand curve, it will always operate with excess capacity.B. downward-sloping demand curve, it will always operate at efficient scale.C. perfectly elastic demand curve, it will always operate with excess capacity.D. perfectly inelastic demand curve, it will always operate at efficient scale.
43. Game theory can be used to demonstrate:
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