Question

Mon Comp Outcome Min Unit Cost PRICE (Dollars per jacket) -L- ATC MC MR +LN Demand + 0 10 90 100 20 30 40 50 60 70 80 QUANTITY (Thousands of jackets) Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that P = ATC at the optimal quantity for each firm. Furthermore, the quantity the firm produces in long-run equilibrium is less than the efficient scale. True or False: This indicates that there is excess capacity in the market for jackets. True product variety business-stealing tion may also be socially inefficient because there are too many or too few firms in the market. The presence of the externality implies that there is too little entry of new firms in the market. product variety

Answer 1

Graph and blanks, all are correct

Monopolistic competitive firm produces at P =ATC in long run and there is no excess capacity when production is done at MC=ATC

True

Product variety