Question

MC ATC MC ATC -D MR MR 0 0 (b) MC ATC D MR (c) 65. Refer to the above diagrams, which pertain to monopolistically competitive firms. Short-run equilibrium entailing economic loss is shown by: A) diagram a only. B) diagram b only. C) diagram conly. D) both diagrams a and c. 66. Refer to the above diagrams, which pertain to monopolistically competitive firms. A short-run equilibrium entailing economic profits is shown by: A) diagram a only. B) diagram b only. C) diagram conly. D) both diagrams b and c. 67. Refer to the above diagrams, which pertain to monopolistically competitive firms. Long-run equilibrium is shown by: A) dingram a only. B) diagram b only. C) diagram conly. D) both diagrams b and c. MC ATC $19 16 13 10 MR 0 100 160 180 210 Quantity 68. Refer to the above diagram for a monopolistically competitive firm in short-run equilibrium. This firm's profit maximizing price will be: A) SIO. B) S13. C) SI6. D) $19. 69. Refer to the above diagram for a monopolistically competitive firm in short-run equilibrium. The profit-maximizing output for this firm will be: A) 210. B) 180. C) 160. D) 100. 70. Refer to the above diagram for a monopolistically competitive firm in short-run equilibrium. This firm will realize an economic: A) loss of S320. B) profit of S480. C) profit of $280. D) profit of $600. E) profit of $360.

Answer 1

65) A short-run equilibrium entailing economic loss is shown by:

C) diagram c only

As ATC is above the Price
--
66) A short-run equilibrium entailing economic profits is shown by:

B) diagram b only

As ATC is below the Price
--
67) Long-run equilibrium is shown by:

A) diagram a only

As ATC = P
--
68) The firm's profit-maximizing price will be:

C) $16

As per MR = MC rule
--
69) The profit-maximizing output for this firm will be:

C) 160

As per MR = MC rule
--
70) The firm will realize an economic:

B) profit of $480

Profit = (P - ATC) x Q = (16 - 13) x 160 = $480