part D E QUESTION 4: The graph below shows the demand and costs data for a one of firms operating in amarket with a highly differentiated product/All underlying work must be shownMCATC$11.50$10.00$9.00$6.00DMR200400700s00QuantityA) Refer to the graph above. If the firm in the graph above maximizes profit, it will produceunits of output and charge priceper unit.A) 400; $10B) 600; $6C) 900; $9D) 600; $11.50B) Refer to the graph above. At the profit maximizing output level, the firm from above willearn:A) zero economic profit.B) $900 total economic profit.C) $2,700 economic profit.D) $2,700 economic loss.C) Refer to your answer above. You can conclude that if there are no barriers to entry:a) new fims will enter this industry in the long run in a search of profit.b) existing firms will exit this industry in the long run because of the short-run losses.c) this industry is in long-run equilibrium, and there are no incentives to enter or exit.d) the price per unit of output is equal to the minimum possible average total cost.Price D)Refer your answer above.a) Will the firms' demand curve in the graph above shift to the right or to the left?b) Will the fim's demand curve in the graph above become more or less elastic? Briefly explainwhy?c) If the firm in the graph above chargers in the long-nun equilibrium $10 per unit, what will bethe fim's ATC equal to? What will be the fim's size of a profit?d) What are the ways, the firm in the graph above can differentiate its product from that of itscompetitors? What is the key implication of product differentiation and how consumers benfitfrom it?E) Refer to the graph above. The allocatively and productively efficient output level will beunits and socially optimal price will beA) 400 units; $11.50 B) 900 units; $9C) 600 units; $11.50D) 600 units; $10

When existing firms are making zero economic profit, then the monopolistically competitive market is…

D)Refer your answer above. a) Will the fims' demand curve in the graph above shift to the right or to the left? b) Will the firm's demand curve in the graph above become more or less elastic? Briefly explain why? c) If the firm in the graph above chargers in the long-run equilibrium $10 per unit, what will be the firm's ATC equal to? What will be the fim's size of a profit? d) What are the ways, the firm in the graph above can differentiate its product from that of its competitors? What is the key implication of product differentiation and how consumers benfit from it? E) Refer to the graph above. The allocatively and productively efficient output level will be units and socially optimal price will be A) 400 units; $11.50 B) 900 units; $9 C) 600 units; $11.50 D) 600 units; $10

D)Refer your answer above. a) Will the fims' demand curve in the graph above shift to the right or to the left? b) Will the firm's demand curve in the graph above become more or less elastic? Briefly explain why? c) If the firm in the graph above chargers in the long-run equilibrium $10 per unit, what will be the firm's ATC equal to? What will be the fim's size of a profit? d) What are the ways, the firm in the graph above can differentiate its product from that of its competitors? What is the key implication of product differentiation and how consumers benfit from it? E) Refer to the graph above. The allocatively and productively efficient output level will be units and socially optimal price will be A) 400 units; $11.50 B) 900 units; $9 C) 600 units; $11.50 D) 600 units; $10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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