3. The accompanying graph (bottom of this page) summarizes the demand andcosts for a firm that operates in a monopolistically competitive market.a. What is the firm's optimal output?b. What is the firm's optimal price?c. What are the firm's maximum profits?d. What adjustments should the manager be anticipating?$22021020019018017016015014013012011010090807060MCATC5040302010MR.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25Quantity4. A firm has $1 million in sales, a Lerner index of 0.65, and a marginal cost of$35, and competes against 1,000 other firms in its relevant market.a. What price does this firm charge its customers?b. By what factor does this firm mark up its price over marginal cost?c. Do you think this firm enjoys much market power? Explain.

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Answered: 3. The accompanying graph (bottom of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The graph summarizes the demand and costs for a firm that operates in a monopolistically competitive market. a. What is the firm’s optimal output? b. What is the firm’s optimal price? c. What are the firm’s maximum profits? d. What adjustments should the manager be anticipating?
7. The figure shows the monopolistically competitive market for smartphones. Plot the profit-maximizing price and quantity on the graph. Is this producer earning positive or negative profits in the short run? In the long run, will supply or demand for this producer's good be affected? Will economic profits increase or decrease for this producer?
Question 19 of 20 > O Macmillan Learning The accompanying graph depicts average total cost (ATC), marginal cost (MC), marginal revenue (M), and demand (D) facing a monopolistically competitive firm. Place point A at the firm's profit maximizing price and quantity. What is the firm's total cost? total cost: $ What is the firm's total revenue? total revenue: $ What is the firm's total profit? profit: $ Price and Cost ($) 50 45 40 35 30 25 20 15 10 5 MR MC ATC D 0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity
Microeconomics 2463 Assignment Part 1 - Chapter 15 The market for toothpaste is a monopolistically competitive market. The graph below depicts the demand and marginal revenue curves for this market and the marginal cost and average total cost curves of a monopolistically competitive supplier. Price $10.50 $9.00 $7.50 $6.00 $4.50 $3.00 $1.50 b. Price at the Q in a. c. TR (PxQ) 20 d. TC (ATC x Q) e. Profit (TR-TC) 40 Name MR 60 1 Using the above chart, identify the profit-maximizing quantity of toothpaste that the monopolistically competitive firm should produce, and the per-tube price that it should charge. a. Quantity (chart is in thousands) .MC. ATC: Demand 120 140 80 100 Quantity (thousands of tubes) f. What will happen in this industry in the long-run based on profits in part e? g. What will happen to the demand curve for this particular firm in the long-run based on part f?
Economics You are a manager of a monopolistically competitive firm that is currently charging a price of $5 for its product and, at this price you are selling 52,000 units of your product. At this price and quantity combination, you have estimated your own price elasticity of demand to be -2.0 and you have an advertising elasticity of 0.25. What is the optimal amount for you to spend on advertising?
The following graph summarizes the demand and costs for a firm that operates in a monopolistically competitive market. What is the firm’s optimal output? 2. What is the firm’s optimal price? 3. What are the firm’s maximum profits? 4. What adjustments should the manager be anticipating
Exercise A.8. The graph below corresponds to a company operating in a market under conditions of monopolistic competition: € 5 4 3 2 1 CM CMe 20 40 60 90 100 120 Quantity of output a) What is the level of production maximizes the short-term profits of this company? b) What price will the company charge to maximize its profits? c) What benefits does the company obtain in the short term? d) How would advertising affect the curves shown in the graph? Would profits necessarily increase? Reason your answers.
Cost and revenue The graph presents the short-run costs and revenue for a monopolistically competitive firm. Use this information to $800 Marginal cost Average total cost determine the profit-maximizing output and profit for this 750 firm in the short run 700 650 What is the profit-maximizing output of this 600 550 monopolistically competitive firm? Round your answer to 500 the nearest whole number 450 400 Demand 350 units of output 300 250 What is the maximum level of profits for this 200 monopolistically competitive firm? Round your answer to 150 the nearest whole number Marginal revenue 100 50 0 1 2 3 4 5 6 7 8 9 1011 12 13 14 1516 17 18 19 20 Units of output A
(a) Explain why a monopolistically competitive firm’s profit maximization occurs at the output level when marginal revenue for the firm is equal to its marginal cost. Use a graph to prove your point for a monopolistically competitive firm. (b) What can a monopolistically competitive firm do to try to maintain economic profits?
The graph presents the short-run costs and revenue for a Cost and revenue monopolistically competitive firm. Use this information to determine the profit-maximizing output and profit for this firm $800 Marginal cost Average total cost 750 in the short run. 700 650 600 What is the profit-maximizing output of this monopolistically 550 competitive firm? Round your answer to the nearest 500 whole number. 450 400 Demand 350 300 units of output 250 200 150 What is the maximum level of profits for this monopolistically 100 Marginal revenue competitive firm? Round your answer to the nearest 50 whole number. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Units of output %24
The accompanying graph depicts average total cost (ATC), marginal cost (MC), marginal revenue (M), and demand (D) facing a monopolistically competitive firm. 50 MC 45 Place point A at the firm's profit maximizing price and 40 quantity. 35 What is the firm's total cost? ATC 30 25 total cost: $ 20 15 What is the firm's total revenue? 10 total revenue: $ MR 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity What is the firm's total profit? profit: $ Price and Cost (S)
Exercise 5.1 Describe with the help of graphs the long-term equilibrium of a monopolistically competitive market. What is the relationship between price and ATC? And between the price and the MC?

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