question
if a monopolistic firm is producing where its marginal revenue is less than its marginal cost, then the firm
answer
should produce less outputs to increase profit or reduce losses
question
achieving economic efficiency that reduces the number of resources used but increases the number of socially optimal outputs requires a triple equality. What are the three components that must be equal?
answer
price, marginal cost, minimum average total cost
question
in the long run, if a monopolistically competitive firm is earning normal profits (breaking even), then it should
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not exit the industry because both explicit and implicit costs are covered
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monopolistically competitive firms are not productively efficient because
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output is less than society's optimal level because a producer's average total cost per unit is not at its lowest possible cost
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in long run monopolistic competitive firms,
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will just break even and make no economic profit
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productive efficiency in monopolistically competitive markets does not occur in the long run because firms set the price
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on the demandcurve where MR=MC to maximize economic profit, making output less than optimal from society's perspective
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economic efficiency occurs when firms produce
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where P=MC=minimum ATC
question
po
answer
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