Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive. company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. ? PRICE (Dollars per scooter) 500 450 400 350 300 210 200 150 100 50 0 0 "MC 50 ATC MR Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Scooters) Monopolistically Competitive Outcome Profit or Loss

What are the characteristics of monopolistically competitive markets? If the price of the product in a monopolistically competitive market increases what happens to the number of individual firms in the market and to the level of profit in the long run? Fully explain your answer.

Suppose that a company operates in the monopolistically competitive market for denim jackets. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. ? 100 PRICE (Dollars per jacket) 8 20 60 50 X ATC 20 MC MR 2 2 2 2 10 0 0 30 40 50 60 70 QUANTITY (Thousands of jackets) 10 20 80 Demand 90 100 Mon Comp Outcome Min Unit Cost

Discuss the long-term effects in a monopolistically competitive market if an existing firm is making profits or losses. Use graphs to help your explanations.

Suppose that a firm produces wooden train engines in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve: Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm, Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost.

explain the relationship between the market price and a monopolistically competitive firm’s marginal revenue, be able to find the profit-maximizing output and price

Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. Note: Dashed drop lines will automatically extend to both axes. Select and drag the rectangles from the palette to the graph. To resize, select one of the points on the rectangle and move to the desired position. PRICE (Dollars per bike) 500 450 400 350 PRICE (Dollars per bike) 300 250 200 150 100 50 0 0 MC + 50 100 AC MR 150 200 250 300 350 400 450 500 QUANTITY (Bikes) Demand Enjano Given the profit-maximizing choice of output and price, the shop is earning shops in the industry than in long-run equilibrium. + Monopolistically Competitive Outcome Now consider the long run in which bike manufacturers are free to enter and exit the market. QUANTITY (Bikes) Show the possible effect of free entry and exit by shifting the…

Suppose you manage a firm in a monopolistically competitive market Suppose you manage a firm in a monopolistically competitive market. Which of the following strategies will do a better job of helping you maintain economic profits: obtaining a celebrity endorsement for your product or supporting the entry of firms that will compete directly with your biggest rival? Explain your answer. Suppose you manage a firm in a monopolistically competitive market

The table below shows the total cost (TC) and marginal cost (MC) for Choco Lovers, a monopolistic firm producing different quantities of chocolate gift boxes. Fill in the blanks in the table. Quantity 0 5 10 15 20 25 30 Price $22 20 16 14 12 10 Profit Profit-maximizing quantity Profit-maximizing price 18 Total Revenue 50 100 180 240 280 300 300 Total Cost $50 55 57.5 62.5 72.5 122.5 Marginal Cost Marginal Revenue $1 0.5 2 4 6 1 10 12 8 Instructions: Enter your answers as whole numbers. For profit, round your answer to 2 decimal places. 0 20

a) Using the following graph state the price and quantity the firm will be at if the monopolistic competition market is in long run equilibrium. Explain why the firm will be at that price and quantity. Price P1 MC ATC B P 2 P3 P4 P5 MR D Q2 Q3 Quantity b) State the conditions that establish the market structure monopolistic competition, and state how the market adjusts to long run equilibrium and what is different about long run equilibrium for this market structure.