Please help solve all parts of equation **Homework (13 of 16):****Instructions:**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.**Graph Explanation:**The graph on the left-hand side displays four curves overlaid on a coordinate grid:- The **Demand** curve is a downward-sloping line indicating the relationship between the quantity of bikes demanded and their price. - The **MR (Marginal Revenue)** curve is also downward sloping and lies below the demand curve, demonstrating how marginal revenue decreases with each additional unit sold. - The **MC (Marginal Cost)** curve slopes upwards, showing increasing costs with each additional unit produced. - The **ATC (Average Total Cost)** curve is U-shaped, representing the average total cost at different levels of production.The intersection of the MR and MC curves indicates the profit-maximizing level of output, while the Demand curve will provide the corresponding price.**Symbols Legend:**- **Monopolistically Competitive Outcome:** Represented by a black plus symbol. - **Profit or Loss:** Represented by green triangle symbols to indicate the shaded area of profit or loss.**Text Below the Graph:**Given the profit-maximizing choice of output and price, the shop is making _______ profit, which means there are _______ shops in the industry relative to the long-run equilibrium. ### Demand Curve ExplanationThe graph displays a downward sloping demand curve, which is typical in economic models. It illustrates the relationship between the price of bikes (in dollars per bike) on the vertical axis and the quantity of bikes demanded on the horizontal axis. As the price decreases, the quantity demanded increases, indicating an inverse relationship between price and quantity demanded.### Question and Answer Section**Question:**Which of the following statements are true about both monopolistic competition and monopolies? *Check all that apply.*- [ ] Firms can earn positive profit in the long run.- [ ] Firms earn zero profit in the long run.- [ ] Price equals average total cost in the long run.- [ ] Firms are not price takers. This section encourages learners to identify the similarities in the economic characteristics of both monopolistic competition and monopolies.

Demand Demand QUANTITY (Bikes) Which of the following statements are true about both monopolistic competition and monopolies? Check all that apply. Firms can earn positive profit in the long run. Firms earn zero profit in the long run. O Price equals average total cost in the long run. Firms are not price takers. PRICE (Dollars per bike)

Demand Demand QUANTITY (Bikes) Which of the following statements are true about both monopolistic competition and monopolies? Check all that apply. Firms can earn positive profit in the long run. Firms earn zero profit in the long run. O Price equals average total cost in the long run. Firms are not price takers. PRICE (Dollars per bike)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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