Question

Please indicate the correct answer and why. Graph as instructed with labels. Thank you

The graph shows the demand curve, marginal revenue curve, and cost curves of Bob's Best Burgers, a firm in monopolistic competition Draw a point at Bob's profit-maximizing quantity and price. Draw a shape to show the firm's economic profit or economic loss. Label it appropriately. Price and cost (dollars per burger) АТС Bob's ▼| of S 1 a day If economic loss in the dropdown box and do not enter a minus sign. incurs an economic loss makes an economic profit MR 0 100 150 200 250300 Quantity (burgers per day) >>Draw only the objects specified in the question.

Answer 1

Monopolistic competition profit-maximizing condition: mu R = mu C Hence P = $ 4.0 Q = 100 unit Bobs Loss Per day = Area of rectangle shaded \r\n Economics Loss = L times B = (4.5 - 4) times (100 - 0) = 0.5 times 100 = 50.0 = $50 Hence Bob's incurs an economic Loss of $50 a day.