Question 15The graph shows the marginal cost curve, average total cost curve, demand curve, and marginal revenuecurve of a firm in monopolistic competition in long-run equilibrium.Draw a point at the firm's profit-maximizing output and price. Label it 1.Draw a point to show the firm's efficient scale and its average total cost at that output. Label it 2.Draw a horizontal arrow that indicates the firm's excess capacity. Label it.Price and cost (dollars per pair)50-40-30-20-10-MRD50100150Quantity (pairs of blue jeans per day)MCATC200

A monopolist sets a price in order to sell a smaller number. It indicates that fewer quantities are…

Answered: Question 15 The graph shows the…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter14: Monopolistic Competition And Product Differentiation

Section: Chapter Questions

Problem 10P

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Andreas Day Spa began to offer a relaxing aromatherapy treatment. The film asks you how much to charge to maximize profits. The first two columns in Table 10.5 provide the price and quantity for the demand curve for treatments. The third column shows its total costs. For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost. What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits?
You're the manager of a firm that has constant marginal cost of $6. Fixed cost is zero. The market structure is monopolistically competitive. You're faced with the following demand curve: $12 10 Price 8 6 4 2 0 3 Demand 100 200 300 400 500 600 Quantity Show Transcribed Text a. Determine graphically the profit-maximizing price and output for your firm in the short run. Demonstrate what profit or loss you'll be making. (Please draw a graph) b. What happens in the long run?
Consider the diagram below depicting the revenue and cost conditions faced by a monopolistically competitive firm, and then answer the following questions. $40 $35 $30 MC ATC $25 $20 $17 A $15 $10 4.40 $5 3.25 MR Demand 3 4 5 7 8 9 10 Quantity Instructions: Round your answers to 2 decimal places. a. What is total revenue for this firm? $56.88 b. What is total cost for this firm? $ $58.88 c. What is this firm's economic profit? d. This firm is most likely In long-run ]equilibrlum because Instructions: In order to recelve full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For Incorrect answer(s). click the option twice to empty the box. ? P= ATC. ? P> MC. ? MR = MC. 2 the firm is experlencing normal profits. 2 the firm is experlencing economic profits. 7 demand exceeds marginal revenue. Price and costs
Exercise A.13. Explain and graph the long-run equilibrium of a monopolistic firm and that of a perfectly competitive firm. Compare both situations in terms of the level of production, prices and economic efficiency.
The monopolistically competitive firm represented in the graph is in: $ $11.40 $10.20 $7.50 0 520 630 MC ATC MR Firm's Demand Quantity Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a long-run equilibrium since it is earning zero profit. b short-run equilibrium since it is earning zero profit. C short-run equilibrium, but not long-run equilibrium since it is earning positive economic profit. d long-run equilibrium, but not short-run equilibrium since it is earning positive economic profit. Your answer
1. The graph shows the demand curve and marginal revenue curve of Lite and Kool, Inc., a producer of running shoes in monopolistic competition. Draw the firm's marginal cost curve if Lite and Kool produces 125 pairs of shoes a week. Label it. Draw a point at the profit-maximizing quantity and price. If the average total cost at the profit-maximizing quantity is $50 a pair, Lite and Kool's economic profit is $_____ 2.A single−price monopoly has marginal revenue and marginal cost equal to $19 at 15 units of output where the price on the demand curve is $38. What is the firm's total revenue? A.$19 B.$570 C.$38 D.$285 E. There is not enough information given to answer the question.
II. The figure is drawn for a monopolistically competitive firm. PRICE 140 123.33 90 56.67 100 133.33 QUANTITY MC ATC Demand MR Refer to the figure above and explain: A). In order to maximize its profit, how many units the firm will choose to produce? 100 B). When the firm is maximizing its profit, the markup over marginal cost amounts to 50 C). The firm's maximum profit is D). Efficient scale is reached beyond which level of units? 133.33

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