3. Consider the following cost diagram for a piza restaurant, a firm in a monopolistically competitive industry. Price Average cost, MC Marginal cost, MC Perceived demand curve For firm MR Quantity a) Draw a copy of the graph showing the optimal quantity and price for the firm, and the areas that represent its total cost and total profit. b) Given the cost diagram exactly as it is drawn, describe what is likely to happen to the restaurant's economic profit in the long-run, and why. c) Suppose that after the market has reached long-run equilibrium, local consumer tastes change away from this restaurant and demand for its pizzas falls. What will happen to the restaurant's profit margin in this scenario?

3. The components of marginal revenue Sean's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Sean produced eight fire engines, but he has decided to increase production to nine fire engines. The following graph shows the demand curve Sean faces. As you can see, to sell the additional engine, Sean must lower his price from $80,000 to $60,000 per fire engine. Note that while Sean gains revenue from the additional engine he sells, he also loses revenue from the initial eight engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $60,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $60,000. PRICE (Thousands of dollars per fire engine) Sean 100 90 80 70 40 10 ++ 0 0 1 True + 2 False 3 4 5 QUANTITY…

Price and costs Consider the diagram below depicting the demand and cost conditions faced by a monopolistically competitive firm. a. Use the graph to show how price and output will vary depending upon which point the firm produces. Indicate the levels that will be produced under profit maximization, productive efficiency, and allocative efficiency. Instructions: (1) Use the tool provided 'Profit maximizing' to plot a point showing the price-quantity combination when the firm is maximizing profit. (2) Use the tool provided 'Productive efficiency' to plot a point showing the price-quantity combination when the firm is producing the productively efficient output level. (3) Use the tool provided 'Allocative efficiency' to plot a point showing the price-quantity combination when the firm is producing the allocatively efficient output level. Demand MR Quantity MC Tools -9 --i Productive eff Profit maximiz ATC Allocative effi

A monopolistically competitive firm in a long-run equilibrium will likely produce which of the following?  A. a technically efficient amount of outputB. less than a technically efficient amount of output and less than an allocatively efficient amount of outputC. more than a technically efficient amount of output but less than an allocatively efficient amount of outputD. an allocatively efficient amount of production.E. less than a technically efficient amount of output and more than an allocatively efficient

4. Study Questions and Problems #4 Consider this statement: "Because price equals long-run average cost and profits are zero, a monopolistically competitive firm is efficient." Do you agree or disagree? Agree, because a monopolistically competitive firm produces a socially optimal output. Disagree, because a monopolistically competitive firm does not produce enough output from a socially optimal point of view. Disagree, because a monopolistically competitive firm produces too much output from a socially optimal point of view.

The Specialty Cake Store, a monopolistically competitive firm, is producing 200 decorated cakes per day and selling each cake for $12. At that production level ATC is $20, AVC is $15, AFC is $5, and both MR and MC are $8. This firm should Question 9Answer a. increase output to the point where price equals marginal cost. b. shut down and just pay fixed costs. c. decrease output to the point where marginal cost equals average cost. d. continue to produce 200 cakes, as price is greater than AFC.

1.How short-run profit or losses induce entry or exit Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC).on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company.   PLEASE HELP ME

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2. Draw a diagram depicting a firm that is making a profit in a monopolistically competitive market. Now show what happens to this firm as new firms enter the industry.

Sub : EconomicsPls answerin 15 mins.Dnt CHATGPT.I ll upvote. Thank You