SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.90) What effect does the entry of new firms in a monopolistically competitive market have onthe economic profits of existing firms in the market? How might existing firms attempt tocounteract this effect?90)
Diff: 2Page Ref: 437-438/437-438Topic: Monopolistic Competition in the Long RunLearning Outcome: Micro 15: Discuss the role of differentiation in monopolistic competition incomparison to other market conditionsAACSB: Reflective Thinking91) Sparkle, one of many firms in the market for toothpaste, is in long-run equilibrium.Sparkle has a small market share and has been in business for a long time.a.Identify the market structure in which Sparkle operates. Explain your answer.b.What is Sparkleʹs profit or loss? Explain your answer. If you cannot determine theprofit or loss, explain what information is missing.c.Draw a diagram showing Sparkleʹs demand curve, marginal revenue curve, averagetotal cost curve and marginal cost curve. Label your diagram.91)
Diff: 3Page Ref: 438-439/438-439Topic: Long-Run EquilibriumLearning Outcome: Micro 15: Discuss the role of differentiation in monopolistic competition incomparison to other market conditionsAACSB: Analytic SkillsESSAY. Write your answer in the space provided or on a separate sheet of paper.