A monopolistic competitor has the following information about cost and demand. QuantityPrice ($)Total Revenue($)Marginal Revenue($)Total Cost ($)Marginal Cost ($)Average Cost($)02502530——2244823352.517.5423922145511.2562213219607.51082116817778.59.6310202001510011.5101219228131261310.514182521116519.511.791617272921022.513.13181628872602514.44201530053203016 If this industry was perfectly competitive, what price would the good sell for?Question 5 options: $15 $19 $21 $23

In monopolistic competition, profit is maximised at a point where marginal revenue is equal to marginal cost. In perfectly competitive market, price is constant so price is equal to marginal cost in the short run. In the long run price is equal to minimum average cost.Ans) the correct option is c) $ 21 In perfectly Competitive market, Price is equal to minimum Average cost. From the table, it is seen that Average cost is minimized at price $ 21. Average minimum cost is $ 9.63.Ans) the correct option is c) $ 21

Answered: A monopolistic competitor has the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

A monopolistic competitor has the following information about cost and demand.

Quantity	Price ($)	Total Revenue ($)	Marginal Revenue ($)	Total Cost ($)	Marginal Cost ($)	Average Cost($)
0	25	0	25	30	—	—
2	24	48	23	35	2.5	17.5
4	23	92	21	45	5	11.25
6	22	132	19	60	7.5	10
8	21	168	17	77	8.5	9.63
10	20	200	15	100	11.5	10
12	19	228	13	126	13	10.5
14	18	252	11	165	19.5	11.79
16	17	272	9	210	22.5	13.13
18	16	288	7	260	25	14.44
20	15	300	5	320	30	16

If this industry was perfectly competitive, what price would the good sell for?

Question 5 options:

	$15
	$19
	$21
	$23

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions