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If monopolistically competitive firms are making positive economic profits then new firms would a make demand more inelastic

If monopolistically competitive firms are making positive economic profits, then new firms would a make demand more inelastic. b charge higher prices. c begin to enter the industry. d leave the industry. e reduce their costs. The following table shows a small community’s demand for monthly subscriptions to a streaming movie service. Assume that only two firms (Nextflix and Flixbuster) sell in this market, that each firm offers the same quality of service and movie selection, and that each firm’s marginal cost is constant and equal to 0 (zero) due to excess capacity. Use this information to answer the following questions: Price/Month (P) Number of Customers (Q) Total Revenue/Month (TR) $10 0 $0 9 100 900 8 200 1,600 7 300 2,100 6 400 2,400 5 500 2,500 4 600 2,400 3 700 2,100 2 800 1,600 1 900 900 0 1,000 0 If this market were a monopoly instead of a duopoly, the market price would be ________ and the quantity of streaming movie subscriptions purchased each month would be ________. a $7; 300 b $9; 100 c $3; 700 d $5; 500 e $0; 1,000

Apr 21 2020 View more View Less

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