Consider the following graph of a monopolistically competitive firm: 50 45 40 35 ↑ Price 20 15- 10- MC ATC MR 10 20 30 40 50 60 70 80 Quantity a. When the firm profit maximizes, what is the amount of the firm's profit or loss? Is this firm in the short run or long run equilibrium and why? b. Assume that this firm is typical of other firms in the industry. Given the profit (or loss) that firms in the market are earning, what adjustments will happen in the long run for the market to reach long run equilibrium? c. What is the similarity between the long run equilibrium of this monopolistically competitive firm from a perfectly competitive firm? What is (are) the difference(s) in their long run equilibrium situation (consider price and output levels)?

Consider the following graph of a monopolistically competitive firm: 50 45 40 35 ↑ Price 20 15- 10- MC ATC MR 10 20 30 40 50 60 70 80 Quantity a. When the firm profit maximizes, what is the amount of the firm's profit or loss? Is this firm in the short run or long run equilibrium and why? b. Assume that this firm is typical of other firms in the industry. Given the profit (or loss) that firms in the market are earning, what adjustments will happen in the long run for the market to reach long run equilibrium? c. What is the similarity between the long run equilibrium of this monopolistically competitive firm from a perfectly competitive firm? What is (are) the difference(s) in their long run equilibrium situation (consider price and output levels)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Kindly answer my concern. Thank you In no fewer than 350 words, Why is technical writing vital in our everyday lives?
Calculate total profit when total revenue is $700 and total cost is 60% of total revenue
how to calculate total cost analysis
what specific cost is the normal rate of return to a company?
When the production volume (Q)is(100)units and the total costs (TC)is (1500) omani RIyals and fixed costs (900) Riyals then What is the variable cost ?
Jenkins Ltd manufactures remote control cars which sells for $500 each. The fixed cost is $70000 and the variable cost per unit is $300. Jenkins sold 200 units of car. Find the total cost and total revenue for Jenkins Ltd.
Explain neatly
If the total fixed cost is 4400 and the number units is 10 units find the average fixed cost?
A cost function is given. C(q) = 3600 + 5q-0.02q² + 0.00039³ (a) Find the average cost and marginal cost functions. +5 -0.02q +0.0003q average cost 3600 9 marginal cost 5 -0.04q+0.0009q (b) Use graphs of the functions in part (a) to estimate the production level that minimizes the average cost. (Round your answer to the nearest integer.) 194 ✓ units (c) Use calculus to find the minimum average cost. (Round your answer to two decimal places.) $ 32.41 X (d) Find the minimum value of the marginal cost. (Round your answer to two decimal places.) $ 4.56
Total cost and output are $3000 and 60 respectively Calculate average cost
calculate and plot the following: No of Units Total Cost 0 5 1 9 2 12 3 15 4 20 5 30 6 42 a) Variable cost b) Fixed Cost c) Average Fixed Cost d) Average Variable Cost e) Maginal Cost
Bags/Participants Fixed Cost Variable Cost Total Cost 0 $1,700 $ - $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 400 $1,700 $5,200 $6,900 500 $1,700 $9,000 $10,700 600 $1,700 $15,000 $16,700 700 $1,700 $23,800 $25,500 800 $1,700 $36,800 $38,500 900 $1,700 $55,800 $57,500 1,000 $1,700 $83,000 $84,700 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? A Use the profit maximizing rule, MR ≥ MC, buy 300 bags. B Use the profit maximizing rule, MR ≥ MC, buy 200 bags. C Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300. D Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.