2 d. What long-run adjustments should you expect? Explain.O Entry will occur until profits are zero.ONeither entry nor exit will occur.O Exit will occur until profits rise sufficiently high. You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q=48-4Pand QQ) = 4+3Q+Q²a. Find the inverse demand function for your firm's product.P=\b. Determine the profit-maximizing price and level of production.Instruction: Price should be rounded to the nearest penny (two decimal places).Price: $Quantity:c. Calculate your firm's maximum profits.Instruction: Your response should appear to the nearest penny (two decimal places).d. What long-run adjustments should you expect? Explain.Entry will occur until profits are zero.

Monopolistically competitive market maximizes profit where the marginal revenue is equal to marginal…

Answered: d. What long-run adjustments should you…

d. What long-run adjustments should you expect? Explain. O Entry will occur until profits are zero. O Neither entry nor exit will occur. Exit will occur until profits rise sufficiently high.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

d. What long-run adjustments should you expect? Explain.
O Entry will occur until profits are zero.
ONeither entry nor exit will occur.
O Exit will occur until profits rise sufficiently high.

You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q=48-4P
and QQ) = 4+3Q+Q²
a. Find the inverse demand function for your firm's product.
P=\
b. Determine the profit-maximizing price and level of production.
Instruction: Price should be rounded to the nearest penny (two decimal places).
Price: $
Quantity:
c. Calculate your firm's maximum profits.
Instruction: Your response should appear to the nearest penny (two decimal places).
d. What long-run adjustments should you expect? Explain.
Entry will occur until profits are zero.

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