1- Consider the following graph of a firm in the industry to answer the following: ATC, IImts of Y A. Is this firm working in a competitive market or monopoly? Explain. B. Is it working in short or long run? Explain. C. Does this firm achieve economic profits, or losses, or breakeven? Expiain.

1- Consider the following graph of a firm in the industry to answer the following: ATC, IImts of Y A. Is this firm working in a competitive market or monopoly? Explain. B. Is it working in short or long run? Explain. C. Does this firm achieve economic profits, or losses, or breakeven? Expiain.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 2CQQ

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1- Consider the following graph of a firm in the industry to answer the following:
ATC,
IImits of r
A. Is this firm working in a competitive market or monopoly? Explain.
B. Is it working in short or long run? Explain.
C. Does this firm achieve economic profits, or iosses, or breakeven? Expiain.

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3. The components of marginal revenue Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced seven trucks, but then decided to increase production to eight trucks. The following graph gives the demand curve faced by Jabari's Hook NLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $100,000 to $50,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial seven engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial seven engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000. PRICE (Thousands of dollars per fire engine) 275 250 225 200…
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The situation facing by firm “Smart”, a producer of running shoes, is shown in the following figure. What quantity does Smart Shoes produce? Answer: What is the price of a pair of Smart shoes? Answer: What is Smart’s economic profit or economic loss? Answer: