4. Is monopolistic competition efficient? Suppose that a company operates in the monopolistically competitive market for denim jackets. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost 100 90 Mon Comp Outcome 80 Min Unit Cost 60 Dollars per jacket) 50 ATC O M hpCENGAGE | MINDTAP Homework (Ch 16) ? 100 E 90 Mon Comp Outcome 70 60 Min Unit Cost 50 PRICE (Dollars per jacket) 40 ATC 30 20 MC 10 MR Demand 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of jackets) MO D homox (159) x 1 Wing lap Reg, X MindTap - Cer X y! course hero x Search Resu x . Citrus Bool x G. 2 ng.cengage.com/staticb/ui/evo/ index.html7deploymentld=56736619720212108401873280819&eISBN=9781337096577&id=199009924%&snapshotlo.380446.. EKS - Nicholas W. A ALEKS - Nicholas W.. ALEKS- ONLINE Q.. ^ C4ELink Log in to t. D DAY BOOKme CENGAGE | MINDTAP Search this course Homework (Ch 16) IMC X 10 MR Demand 10 20 30 40 50 6 70 80 90 100 QUANTITY (Thousands of jackets) Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that at the optimal quantity for each firm. Further, the quantity the firm produces in long-run equilibrium is the efficient scale. P = ATC True or False: This indicates that there is excess capacity in the market for jackets. P > ATC MR > MC O True MR = MC O False Monopolistically competitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of the externality implies that there is too much entry of new firms in the market. Grade It Now Save & Continue Continue without saving Apr 19 17:13 O BMOD pMind Tap - Cer X y course hero . C nig, cengage.com/staticb/ui/evo/index .htmldeploymentid=56736519720212108401873260819&eISBN=978133709657 7 &id= 1990099244& snapshotid-380446. A ALEKS- Nicholas W. A ALEKS- Nicholas W_ ALEKS-ONLINEQ. ~ CAELink Log in to t. CENGAGE MINDTAP Homework (Ch 16) Q Search this course MC 10 MR Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of jackets) S Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that __ at the optimal quantity for each firm. Further, the quantity the firm produces in long-run equilibrium is the efficient scale. True or False: This indicates that there is excess capacity in the market equal to greater than True less than False Monopolistically competitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of the externality implies that there is too much entry of new firms in the market. Grade It Now Save & Continue Continue without saving Apr 19 O MOALEXS Nicholas W. A ALEXS Nicholas W. ALEKS- ONLINEQ V CAELink Log in to L. CENGAGE | MINDTAP Q Homework (Ch 16) 10 MR Demand 10 20 30 40 50 0 60 70 80 90 100 QUANTITY (Thousands of jackets) Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that _ at the optimal quantity for each firm. Further, the quantity the firm produces in long-run equilibrium is the efficient scale. True or False: This indicates that there is excess capacity in the market for jackets. O True product variety business-stealing petitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of the externality implies that there is too much entry of new firms in the market. Grade It Now Save & Continue Continue without saving O O M hp