Consider a monopolistically competitive market with NN firms. Each firm's business opportunities are described by the following equations: Demand: Q=100N−PQ=100N−P Marginal Revenue: MR=100N−2QMR=100N−2Q Total Cost: TC=50+Q2TC=50+Q2 Marginal Cost: MC=2QMC=2Q As N rises, the demand for each firm's product: rise or fall? How many units does each firm produce? a: 25 b: 400/N c: 25/N d: 25N
Consider a monopolistically competitive market with NN firms. Each firm's business opportunities are described by the following equations: Demand: Q=100N−PQ=100N−P Marginal Revenue: MR=100N−2QMR=100N−2Q Total Cost: TC=50+Q2TC=50+Q2 Marginal Cost: MC=2QMC=2Q As N rises, the demand for each firm's product: rise or fall? How many units does each firm produce? a: 25 b: 400/N c: 25/N d: 25N
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter10: Strategy: The Quest To Keep Profit From Eroding
Section: Chapter Questions
Problem 7MC: If a firm successfully adopts a product-differentiation strategy, the elasticity of demand for its...
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Consider a monopolistically competitive market with NN firms. Each firm's business opportunities are described by the following equations:
Q=100N−PQ=100N−P | |
Marginal Revenue: | MR=100N−2QMR=100N−2Q |
Total Cost: | TC=50+Q2TC=50+Q2 |
Marginal Cost: | MC=2QMC=2Q |
As N rises, the demand for each firm's product: rise or fall?
How many units does each firm produce?
a: 25
b: 400/N
c: 25/N
d: 25N
What price does each firm charge?
a: 75N
b: 125/N
c: 75/N
d: 100/N
How much profit does each firm make?
a: 1,250/N*2−50
b: 2,500/N*2−50
c: 50+625/N*2
d: 1,875/N*2
In the long run, how many firms will exist in this market?
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