Question

8. Refer to the graph above depicting a perfectly competitive firm. When maximizing profit, the total profit earned by the firm represented is: A. $220. B. $275. C. $330 D. $605, 26. Refer to the graph above of a monopolistically competitive firm. If the firm maximizes profit, it will earn: A. zero economic profit this year. B. $320,000 economic profit this year. C. 584,000 economic profit this year. D. $56,000 economic profit this year. ATC AVC - 01 02 03 04 Out $100 $90 MC 580 AC Price, cost, revenue $70 560 6. Refer to the graph above. If the market price falls below the fim will: A. shut down. B. produce Q1 in the short-run but shut down in the long-run. C. produce Q2, earning a profit. D. produce Q2, breaking even. 7. Refer to the graph above. If the market price is P4 the fim will produce: A. Q2 and incur a loss. B. Q: and break even. C. Q: and eam a profit. D. Q4 and earn a profit D $50 MR 7000 14000 21000 12000 Dresses per year $12.50 27. Refer to the graph above of a monopolistically competitive firm. In the long-run: A. marginal cost will fall for firms that remain as other firms exit the industry. B. average total cost will rise for firms that remain as other firms enter the industry C. demand will fall for firms that remain as other firms enter the industry. D. demand will rise for firms that remain as other firms exit the industry ATC P-MR $10.00 $7.50 28. Monopolistically competitive fimms: A. can earn economic profits or losses in both the short-run and the long-run. B. can earn either profīts or losses in the short-run, but eam zero economic profits in the long- 4 run C. eam economic profits in the short-run but zero economic profits in the long-run. D. earn zero economic profits in both the short-run and the long-run. 10 20 30 40 50 60 70 80 90 100 110 120 130 Quoty

Answer 1

is mek when MR-mc 2 D Profit is This oly = 7ooo 4 Coss = 90-727000 This in lay 28) B 140000 some frims will exit 4 Demand shifted outward (increases. ble of free entry & cxit, monopolistic fum only can zero co profit in Long can uur. A AEP firin can shut down Puice - min of Ave bla D ferim produces Oyunit of At Puie - Py Output 4 conomic profit corny an ble p> AC 8 A 1104 Proft F (108) llo a 220