A monopolistically competitive firm has a total cost curve represented by TC = 250+ 3Q + Q² and a marginalcost represented by MC = 3 + 2Q. The firm faces the demand curve P = 99 - 2Q. What do we expect tohappen in the long run?O Firms will exit the industry, but if this firm remains its profits will increase.O The firm will earn an economic profit in the long run.O Additional firms will enter the industry and this firm's profit will decrease.O This firm will sell its product at marginal cost.MacBook Aesc800F1F2F3F42$4WRTYockG%242

Answered: cost represented by MC = 3 + 2Q. The…

cost represented by MC = 3 + 2Q. The firm faces the demand curve P = 99- 2Q. What do we expect to happen in the long run? %3!

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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Question

A monopolistically competitive firm has a total cost curve represented by TC = 250+ 3Q + Q² and a marginal
cost represented by MC = 3 + 2Q. The firm faces the demand curve P = 99 - 2Q. What do we expect to
happen in the long run?
O Firms will exit the industry, but if this firm remains its profits will increase.
O The firm will earn an economic profit in the long run.
O Additional firms will enter the industry and this firm's profit will decrease.
O This firm will sell its product at marginal cost.
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