Monopolistic Competition in the Long-Run: Econ Concepts in 60 Seconds

Mr. Clinton from ACDC Econ explains key economic concepts in 60 seconds, focusing on monopolistic competition. He demonstrates how to draw a monopolistically competitive firm in long-run equilibrium and compares it to perfect competition. The video covers demand curves, marginal revenue, marginal cost, and average total cost, emphasizing the concept of the sweet spot in graphs. The tutorial concludes with the understanding that in the long run, firms in monopolistic competition make no economic profit.

What is the primary focus of a monopolistically competitive firm in the long run?

• Increasing market share

• Eliminating all competition

• Achieving long-run equilibrium

• Maximizing short-term profits

How does the demand curve typically slope for a monopolistically competitive firm?

• Downward

• Upward

• Horizontal

• Vertical

In a monopolistically competitive market, where is the marginal revenue curve positioned relative to the demand curve?

• Below the demand curve

• Coinciding with the demand curve

• Above the demand curve

• Parallel to the demand curve

What happens to economic profit for a monopolistically competitive firm in the long run?

• It becomes negative

• It remains positive

• It becomes zero

• It fluctuates unpredictably

Where should the Average Total Cost (ATC) curve intersect in a monopolistically competitive firm's graph?

• At the origin of the graph

• At the 'sweet spot' on the demand curve

• At the lowest point of the marginal cost curve

• At the highest point of the demand curve