Compared with perfect competition and quantity produced

Assignment Help Business Economics

Reference no: EM13801133

Compared with perfect competition, quantity produced in monopolistic competition is inefficient as price is higher than marginal cost (i.e. allocative inefficiency). Why do some economists argue that even if price is higher than marginal cost, it does not necessarily imply inefficiency?

Reference no: EM13801133

Questions Cloud

Economists is their different treatment of cost of capital : A key difference between accountants and economists is their different treatment of the cost of capital. Does this cause an accountants estimate of total costs to be higher or lower than an economists estimate? Explain. Kelly is a clerk and she earns..

What is the value per share of the companys stock : Ragan, Inc, was founded nine years ago by brother and sister Carrington and Genevieve Ragan. The company manufactures and installs commercial heating, ventilation, and cooling (HVAC) units. Ragan, Inc., has experienced rapid growth because of a propr..

Natural monopoly by setting prices equal to marginal costs : Monopoly is inefficient as it charges prices higher than marginal costs. Is it feasible for the government to regulate a natural monopoly by setting prices equal to marginal costs? Roche plans to sell Tamiflu at higher prices in Europe and North Amer..

Constant marginal cost and constant average total cost : De Beers is a monopolist which supplies diamonds with constant marginal cost and constant average total cost. Draw the average cost, marginal cost, demand and marginal revenue curves. Show the price charged by De Beers without price discrimination. U..

Compared with perfect competition and quantity produced : Compared with perfect competition, quantity produced in monopolistic competition is inefficient as price is higher than marginal cost (i.e. allocative inefficiency). Why do some economists argue that even if price is higher than marginal cost, it doe..

Demonstrate that firms are earning economic profits : Apples are bought and sold in a competitive market. Use a graph for the apple market and a graph for an individual firm to demonstrate that firms are earning economic profits. Explain, without using a diagram, whether the situation in (a) can be main..

Explore one of sophisticated alternative pricing techniques : Explore one of the sophisticated alternative pricing techniques (i.e. price discrimination, price bundling, etc.) and provide an example of how it is used. What are some constraints that may limit the ability of firms to use these techniques?

How much do you need to save each year if you believe you : Let's say you are 25 years old and you are starting your career. you have student debt. You want to retire at age 65 and you believe you will need one millions dollars saved. How much do you need to save each year if you believe you can invest it in ..

What would be resulting excess reserves created by deposit : Assume there was a new $100,000 deposit into a checking account at a bank. What would be the resulting excess reserves created by that deposit if banks faced a reserve requirement of: a. 10 percent? b. 20 percent? c. 25 percent? d. 50 percent?

User Account

All Pages