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Line 14: − + − '''5. A monopolistic competitive firm has the following characteristic that is lacking for a perfectly competitive firm:+ − − (a) There are low barriers to entry − (b) MR = MC in the long run. − (c) P > MC − (d) There are many competitors. − − Choose one of the above and explain your answer.''' − +
Economics Homework Thirteen Answers - Student Ten (view source)
Revision as of 15:39, December 17, 2009
, 15:39, December 17, 2009no edit summary
'''4. Review: Suppose that after completing this course, you start a new company. In your first year, you "broke even" (had zero profits), and in your second year you want to increase your revenue and profits. After careful study of your market, you decide that you can increase your revenue by increasing your price. Therefore your good must be price elastic/inelastic (choose one).'''
'''4. Review: Suppose that after completing this course, you start a new company. In your first year, you "broke even" (had zero profits), and in your second year you want to increase your revenue and profits. After careful study of your market, you decide that you can increase your revenue by increasing your price. Therefore your good must be price elastic/inelastic (choose one).'''
inelastic
inelastic
'''6. You can go on www.orbitz.com and watch the price of airline tickets change from day-to-day. If you pick fixed dates of travel, such as Jan. 15 to fly somewhere and Jan. 18 to return, then you will notice that the closer you get to those dates, the higher the price of the ticket usually is. In other words, the earlier in advance that you can buy a ticket, the cheaper it usually is. Explain how this illustrates a basic difference between long run and short run costs.'''
'''6. You can go on www.orbitz.com and watch the price of airline tickets change from day-to-day. If you pick fixed dates of travel, such as Jan. 15 to fly somewhere and Jan. 18 to return, then you will notice that the closer you get to those dates, the higher the price of the ticket usually is. In other words, the earlier in advance that you can buy a ticket, the cheaper it usually is. Explain how this illustrates a basic difference between long run and short run costs.'''
costs are always cheaper in the long run
'''7. Pick any aspect of monopolistic competition (other than problem 5 if you answered that) and explain it.'''
'''7. Pick any aspect of monopolistic competition (other than problem 5 if you answered that) and explain it.'''