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Question 3 1 pts The market for plumbing services in a city can be characterized by the model of monopolistic competition. SuQuestion 5 1 pts Price, marginal revenue, marginal cost, average total cost a P. b P2 P3 MC ATC С e g d D MR 0 Q Q2 Q3 QuantiQuestion 6 1 pts Price, marginal revenue, marginal cost, average total cost a P MC b ATC P2 P3 с 9 f d D MR 0 Q Q Quantity pe

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Answer #1

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3 equals average total cost.

In the long ru the monopolistically competititve firms do not enjoy economic profits, at ATC=MC=P

5bf.

The profit maximising quantity is at MR=MC, her its at Q2, the price at Q2 i te demand grap is the sale price. The profit is bf.

6. a reduction in total revenue.

will lead to a decrease in reveue, as the ouput will decrease at a greater proportion than the increase in price.

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