Monopolistic Competition Consider the following graph, (graph 1) for the short run equilibrium for a monopolistically competitive firm producing printers for commercial operations. $ Price per unit Graph1 ATC Pi MC P2 P3 Q3 MR2 MR1 D₂ D₁ Quantity The following information is given: D₁ $35,000-$150 TC= $550,000+ $1,0000+ $100² Answer the following and referring to the relevant elements of graph 1 above and show all workings. (a) Calculate price output and profit for the short run equilibrium (show all workings). (b) Calculate price, output and profit for the long run equilibrium (with and without product differentiation) (show all workings). (c) is the market allocatively efficient in the short run or long run (why or why not?). (d) Is the market productively efficient in the short run or long run (why or why not?).

Monopolistic Competition Consider the following graph, (graph 1) for the short run equilibrium for a monopolistically competitive firm producing printers for commercial operations. $ Price per unit Graph1 ATC Pi MC P2 P3 Q3 MR2 MR1 D₂ D₁ Quantity The following information is given: D₁ $35,000-$150 TC= $550,000+ $1,0000+ $100² Answer the following and referring to the relevant elements of graph 1 above and show all workings. (a) Calculate price output and profit for the short run equilibrium (show all workings). (b) Calculate price, output and profit for the long run equilibrium (with and without product differentiation) (show all workings). (c) is the market allocatively efficient in the short run or long run (why or why not?). (d) Is the market productively efficient in the short run or long run (why or why not?).

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 1PA

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