3. Crusty's is a pizzeria with the following cost structure: its total fixed cost is $1200 per day, its total variable cost for producing a pizzas is, and its marginal cost is. The daily quantity demanded for Crusty's pizzas is Qp = 900 - 30P, where P is the price of a Crusty's pizza. The market for pizza is monopolistically competitive. (a). Explain which features of the market for pizza lead to its being monopo- listically competitive. (b) What are the profit-maximising quantity of pizzas that Crusty's will pro- duce, the price it will charge, and its profits? (c) Does Crusty's have market power? Explain how you know.
3. Crusty's is a pizzeria with the following cost structure: its total fixed cost is $1200 per day, its total variable cost for producing a pizzas is, and its marginal cost is. The daily quantity demanded for Crusty's pizzas is Qp = 900 - 30P, where P is the price of a Crusty's pizza. The market for pizza is monopolistically competitive. (a). Explain which features of the market for pizza lead to its being monopo- listically competitive. (b) What are the profit-maximising quantity of pizzas that Crusty's will pro- duce, the price it will charge, and its profits? (c) Does Crusty's have market power? Explain how you know.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 4QFR
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