Question

Figure 16-3 This figure depicts a situation in a monopolistically competitive market. BE 9. Refer to Figure 16-3. What price will the monopolistically competitive firm charge in this market? a $70 b. $80 c. $60 d. 575 10. Refer to Figure 16-3. How much profit will the monopolistically competitive firm earn in this situation? a. So b. $80 c. $400 d. $200 11. Refer to Figure 16-3. How much output will the monopolistically competitive firm produce in this situation ..40 units b. 25 units c. 20 units d. 80 units 12. Refer to Figure 16-3. This firm is operating a. in the short run and earning a positive economic profit. b. in the long run and incurring and economic loss. e. in the long run and earning a positive economic profit. d. in the short run and breaking even.

Answer 1

Figure 16-3 This figure depicts a situation in a monopolistically competitive market. Equilibrium condition is marginal cost equals to marginal revenue. MR =MC 70 75 100 9. Refer to Figure 16-3. What price will the monopolistically competitive firm charge in this market? a $ 70 b. $80 The firm will charge $80. c. $60 d. $75 At this price the MR=MC 10. Refer to Figure 16-3. How much profit will the monopolistically competitive firm carn in this situation? a. SO b. $80 Profit = TR - TC c. $400 1. $200 TR = Q*AR(Price) TR = 20$$80= $1600 TC = Q ATC TC = 20*$70 = $1400 Profit = $1600 - $1400 = 200 II. Refer to Figure 16-3. How much output will the monopolistically competitive firm produce in this situation? a 40 units b. 25 units c. 20 units The profit maximizing d. 80 units qutput is 20 units The firm is definitely in the short run and earning economic profit 12. Refer to Figure 16-3. This form is operating a. in the short run and earning a positive economic profit. (ATC is less than AR). camera The firm in long run only gets c. in the long run and earning a positive economic profit. normal profits. d. in the short run and breaking even.