Question

Which of the following industries are monopolistically competitive? D A. Home renovation firms B. Textbook publishing (approximately 10 introductory economics textbooks are in use on campuses in Canada this year) C. Cigarette manufacturing OD. Post secondary education DE None of the above

Answer 1

Q1. Option 1
As home renovation firms have low barriers to entry, decisions of one firm do not affect directly and offer similar but differentiated services

Q2.

Q	P	TR=Q*P	MR=Change in TR/Change in Q	TC	ATC=TC/Q	MCChange in TR/Change in Q	TP=TR-TC
650	28	18200		10000	15.38		8200
750	27	20250	20.50	11450	15.27	14.50	8800
850	26	22100	18.50	13100	15.41	16.50	9000
950	25	23750	16.50	14950	15.74	18.50	8800
1050	24	25200	14.50	17600	16.76	26.50	7600
1150	23	26450	12.50	20450	17.78	28.50	6000
1250	22	27500	10.50	23500	18.80	30.50	4000
1350	21	28350	8.50	26650	19.74	31.50	1700
1450	20	29000	6.50	30000	20.69	33.50	-1000