91Ó°ÊÓ

What are the differences between the long-run equilibrium of a perfectly competitive firm and the long-run equilibrium of a monopolistically competitive firm?

Why doesn't a monopolistically competitive firm produce where \(P=M C\), as a perfectly competitive firm does?

What are the key factors that determine the profitability of a firm in a monopolistically competitive market?

What effect does the entry of new firms have on the demand curve of an existing firm in a monopolistically competitive market?

Why is a monopolistically competitive firm not productively efficient? In what sense does a monopolistically competitive firm have excess capacity?

What is the difference between zero accounting profit and zero economic profit?

Why does a local McDonald's face a downward-sloping demand curve for its Quarter Pounders? If a McDonald's raises the price of Quarter Pounders above the prices other local fast-food restaurants charge for hamburgers, won't it lose all its customers?

With a downward-sloping demand curve, why is average revenue equal to price? Why is marginal revenue less than price?

Why is a monopolistically competitive firm not allocatively efficient?

Does the fact that monopolistically competitive markets are not allocatively or productively efficient mean that there is a significant loss in economic well-being to society in these markets? In your answer, be sure to define what you mean by "economic well-being."