Give every answer step by step and take a like 4. Consider the short-run cost and demand data for a monopolistic competitor given in the table below. Compute themissing data. Output Total cost Marginal cost Quantity demanded Price Marginal revenue 0 $750 $180 1 120 $1165 $213521503 165_31354210 41205 270. 5 105 6 3456 90. 74a) At what output level and at what price will the firm produce in the short run? What will be the total profit? (b) What willhappen to demand, price, and profit in the long run?

Let's proceed with the analysis based on the computed data.Solution By StepsStep 1: Calculate…

Answered: 4. Consider the short-run cost and…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 4CQQ

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Andreas Day Spa began to offer a relaxing aromatherapy treatment. The film asks you how much to charge to maximize profits. The first two columns in Table 10.5 provide the price and quantity for the demand curve for treatments. The third column shows its total costs. For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost. What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits?
How does a monopolistic competitor choose its profit-maximizing quantity of output and price?
Make a case for why monopolistically competitive industries never reach long-run equilibrium.
How can a monopolistic competitor tell whether the price it is charging will cause the firm to earn profits or experience losses?
Suppose that, due to a successful advertising campaign, a monopolistic competitor experiences an increase in demand for its product. How will that affect the price it charges and the quantity it supplies?
Quèstion 13 Figure#5 $10 MC ATC $7 $6 $5 $4 $3 $2 $1 MR $0 0 10 20 30 40 50 60 70 80 90 100 Quantity Refer to Figure#5. This figure depicts a situation in a monopolistically competitive market. In long run, how much output will the monopolistic competition produce and will charge at what price? Price 9876 5A32
2. Understanding excess capacity The following table shows the daily cost data and demand schedule for a typical firm producing board games in a monopolistically competitive market in the short run. Fill in the values in the Marginal Cost, Total Revenue, and Marginal Revenue columns in the following table and then answer the questions that follow. Quantity Price Total Cost Marginal Cost (Board games) (Dollars per game) (Dollars) (Dollars) 123456 15.00 15 12.00 20 10.00 27 8.00 32 6.00 35 6 7 8 4.00 42 3.00 48 1.00 56 Total Revenue (Dollars) Marginal Revenue (Dollars) Average Total Cost (Dollars) Under monopolistic competition, a typical firm will produce board games at a price of $ per board game in the short run. Based on your calculations, the firm will Fill in the Average Total Cost column in the previous table. Based on your calculations, the level of excess capacity in this monopolistically competitive market is
The graph below shows cost and revenue curves for a monopolistically competitive firm. Price $2.00 $1.75 $1.50 $1.25 $1.00 $0.75 $0.50 $0.25 0 20 40 60 MR Quantity It will charge a price of $ ATC MC D 80 100 120 140 160 This monopolist's profit-maximizing output level is on the x-axis.] units. [Watch for the scale
QUESTION 11 Price and costs (dollars per calculator) 20 000 16 12 8 0 100 MC ATC O MR 200 300 400 500 600 Quantity (calculators per day) The figure above shows the situation facing Smart Digit, Inc., a firm in monopolistic competition that produces calculators. What quantity does the firm produce? more than 300 calculators per day and less than 400 calculators per day 300 calculators per day 400 calculators per day 200 calculators per day
6
7. The figure shows the monopolistically competitive market for smartphones. Plot the profit-maximizing price and quantity on the graph. Is this producer earning positive or negative profits in the short run? In the long run, will supply or demand for this producer's good be affected? Will economic profits increase or decrease for this producer?
2. Understanding excess capacity The following table shows the daily cost data and demand schedule for a typical firm producing board games in a monopolistically competitive market in the short run. Fill in the values in the Marginal Cost, Total Revenue, and Marginal Revenue columns in the following table and then answer the questions that follow. Total Cost (Dollars) Total Revenue (Dollars) Quantity (Board games) 1 2 3 4 5600 7 8 Price (Dollars per game) 15.00 13.00 12.00 10.00 7.00 5.00 3.00 1.00 Based on your calculations, the firm will 11 20 27 36 45 60 70 104 Under monopolistic competition, a typical firm will produce Fill in the Average Total Cost column in the previous table. Marginal Cost (Dollars) AAAAAAA board games at a price of $ Marginal Revenue (Dollars) AAAAAAA Based on your calculations, the level of excess capacity in this monopolistically competitive market is Average Total Cost (Dollars) per board game in the short run.

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