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ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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E1

Transcribed Image Text:** The following graph shows the marginal revenue (MR), demand (D),
marginal cost (MC) and average total cost (ATC) curve of a monopolistic
comeptitor.
Dollars per unit
MC
MR
Quantity per unit of time
D
ATC
1. Please indicate the optimal output and price for the monopolistic
competitor in the graph
2. Please indicate profit/loss at this price.
3. Briefly, explain why the optimal price and output is different under
monopolistic competition compared to perfect competition?
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