Question

need help filling in the blanks for 1-11, goes with graph.

Insert Table Chart Text Shape Media Comment 3.50 1.75 80 100 150 9 Name Monopolistic Competition HW @3.33 A company introduces paper towels and glass cleaner packaged together and, to the surprise of many, makes a fortune! Eventually rivals follow suit. 1)The SR initial price for each combo. unit is $.__ 2)SR initial ATC per unit is $__ 3)Initial SR quantity is 4)Initially (circle one!) profit/loss per unit is $ 5)Short-run total profit $ 6)The coefficient of elasticity between the biggest reservation price and the short- run price (1009-0q/average ).... 243 word........... P/average P) of the short-run

Answer 1

The steeper MR and Demand curve are for short run and the flatter MR and Demand curve are for long run.

Upward sloping convex curve is marginal cost and the downward sloping convex curve represents average total cost.

Equilibrium occurs where MC=MR.

In the short run MC=MR at Q=100

1. SR initial price is $3.50

2. SR initial ATC is $1.75

3. Initial SR quantity is 100

4. Initially there is PROFIT per unit= $1.75

Reason- Per unit profit=(P-ATC) = (3.50-1.75)= $1.75

5. Short run total profit= $175

Reason- Profit= (P-ATC)*Q= (3.50-1.75)*100= $175

Note-According to HOMEWORKLIB RULES first four questions are answered.