Question

ID: T because the long-run economic 38. Monopolistic competition is simlar to because the way the firm maximizes its profit. proft i s zero; similar to b. monopoly perfect competition Exhibit 10-5 Price MC ATC 39. To maximize profit in the short run, the monopolistic competitive firm in Exhibit 10-5 should a. produce 8 units b. shut down c. produce 10 units d. exit 40. To maximize profit in the short run, the monopolistic competitive firm in Exhibit 10-5 should a. shut down b. set the price at $9 c. set the price at $10 d. set the price at $11 41. The maximum amount of profit for the monopolistic competitive firm in Exhibit 10-5 is a, $16 b.S8 c.$10 d.so 42. In the long run, the monopolistic competitive firm in Exhibit 10-5 can expect a. no change in the industry b. new firms enter into the industry which will reduce the demand for their product and lower their profit c. some firms exit from the industry which will increase demand for their product and increase their profitability d. some firms exit from the industry which will increase demand for their product and decrease the loss of the remaining firms

Answer 1

a) "A"

It is similar to perfect competition because the firms doesn't make a profit in the long run and it is similar to the monopoly because the firms are price searchers.

b) "A"

The firm in the market will be producing only 8 units of output.

c) "D"

They will be setting the price of $11

d) "A"

the firm in the market will be making a profit of $16 as the price is 11 and the cost is 9 and the firm is producing 8 units.

e) "B"

they can expect more and more firms in the market, that will reduce the output of the firm and reduce the output of the firm this will reduce the profit of the firm.