A monopolistically competitive firm faces demand given by this equation: P = 50 – Q . It has no fixed costs and its marginal cost is $20 per unit. What price will the firm charge when it is maximizing its profits? a. $25 b. $30 c.$35 d. $2

Monopolistically competitive firms in the long run will do which of the following? They will produce where average cost is ________ than minimum average cost and earn ____________. a. higher; economic profitsb. lower; normal profitsc. lower; economic profitsd. higher; normal profits

The graph shows the demand curve, marginal revenue curve, and marginal cost curve of Java Time, Inc., a producer of espresso machines in monopolistic competition. Draw a point at the firm's the profit-maximizing price and quantity. Label it 1. Draw an arrow that shows Java Time's markup. Draw the average total cost curve such that Java Time does not have excess capacity. Label it. Draw a point at the intersection of the ATC curve and the MC curve. Label it 2. Java Time's markup is $a machine. 240 220- 200- 180- 160- 140 120- 100- 80- 60- 40- 20- 04 0 Price and cost (dollars per machine) MC 100 200 300 400 Quantity (espresso machines per week) D MR 500

In monopolistic competition,a firm produces 10,000 units when its marginal revenue equals its marginal cost. At this level of output, the firms average variable cost is $4.30 and its average fixed cost is $2.10. If the firm sells the product for $5 each, at best it is earning a. losses of $7,000. b. a profit of $7,000. c. losses of $14,000. d. a profit of $14,000. e. There is not enough information provided to answer this question.