Question

se m per xyz is a maximum mis 32 and JUM Econ 221-1280 PS5 Fall 2019 Econ 221-1280 P55 3) Monopolistic Competition Long-Run (7 points) Fall 2019 The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopolistically competitive firm are shown in the figure below. a. What is the firm's profit-maximizing Price/Cost (5) output level? b. What is its profit-maximizing price? c. What is the firm's economic profit? 00- d. What would the output level be that is productively efficient (minimizes ATC)? e. At what price and output level would this outcome be allocatively efficient? (Hint: recall that allocative efficiency occurs where Qs = Qd) f. Based on your answers to (d) and (e), is the long-run outcome in a monopolistically competitive market efficient? Why or why not? Quantity

Answer 1

Painaselo& / 40 MC 30 ATC AvC Z I0 Ei MR io Lo 4. Quaury

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d. Jhu autbut lel ohouoy to t minin Paiut uts it, thotd MC ATC and wtur aahandiy hus heu to Paut R is out put lenel cieut the e daue what Uodi to 30 is
these sheets will give you the answers and the reasons for those answers. only a-d has been solved because of no specification available.