Question

Price and cost per unit fo Demand Quantity The figure above represents a firm in a monopolistic competition a. What is the firm's profit-maximizing or loss-minimizing output (0.5 point) b. What is the price they are going to charge at the output from part a) (0.5 point) c. What is the ATC they are subjected to at the output from part a) (0.5 point) d. Is this firm earning a loss or profit? What is it equal to (You can use the letters provided, so for example - PaQ.0)? Also shade this region on the graph. (1.5 points) e. What is total cost equal to at the quantity from part a). You can use the letters provided (so for example - PaQ.0) (0.5 point)

Answer 1

a) Qa (Profit is maximized where MR=MC) (6) Po (c) ATC=Pg to b e (d) From is eaming a lossis It is equal to Pz de la Price & i me Ave wst I ATC d Demand MR Qa - Total Cost = Pg dao.

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