**Problem:** Suppose that a monopolistically competitive restaurant is currently serving 230 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal. **Instructions:** Enter your answers as whole numbers. **a.** What is the size of this firm's profit or loss? [Answer Box] **b.** Will there be entry or exit? [Dropdown: Click to select] Will this restaurant’s demand curve shift left or right? [Dropdown: Click to select] **c.** Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. What is the size of the firm’s economic profit? [Answer Box] **d.** Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. Is the deadweight loss for this firm greater than or less than $60? [Dropdown: Click to select] --- **Notes on Graphs and Diagrams:** This problem set does not include graphs or diagrams. Instead, it requires calculations and conceptual understanding in order to answer questions about profit/loss, market entry/exit, and economic efficiency in a monopolistically competitive market.
**Problem:** Suppose that a monopolistically competitive restaurant is currently serving 230 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal. **Instructions:** Enter your answers as whole numbers. **a.** What is the size of this firm's profit or loss? [Answer Box] **b.** Will there be entry or exit? [Dropdown: Click to select] Will this restaurant’s demand curve shift left or right? [Dropdown: Click to select] **c.** Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. What is the size of the firm’s economic profit? [Answer Box] **d.** Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. Is the deadweight loss for this firm greater than or less than $60? [Dropdown: Click to select] --- **Notes on Graphs and Diagrams:** This problem set does not include graphs or diagrams. Instead, it requires calculations and conceptual understanding in order to answer questions about profit/loss, market entry/exit, and economic efficiency in a monopolistically competitive market.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![**Problem:**
Suppose that a monopolistically competitive restaurant is currently serving 230 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal.
**Instructions:** Enter your answers as whole numbers.
**a.** What is the size of this firm's profit or loss?
[Answer Box]
**b.** Will there be entry or exit?
[Dropdown: Click to select]
Will this restaurant’s demand curve shift left or right?
[Dropdown: Click to select]
**c.** Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. What is the size of the firm’s economic profit?
[Answer Box]
**d.** Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. Is the deadweight loss for this firm greater than or less than $60?
[Dropdown: Click to select]
---
**Notes on Graphs and Diagrams:**
This problem set does not include graphs or diagrams. Instead, it requires calculations and conceptual understanding in order to answer questions about profit/loss, market entry/exit, and economic efficiency in a monopolistically competitive market.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb1bac095-f596-4e03-ba80-5134580049fe%2F9101fe66-03d9-4f79-8d50-096137828ac3%2Fx4nrbvr.jpeg&w=3840&q=75)
Transcribed Image Text:**Problem:**
Suppose that a monopolistically competitive restaurant is currently serving 230 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal.
**Instructions:** Enter your answers as whole numbers.
**a.** What is the size of this firm's profit or loss?
[Answer Box]
**b.** Will there be entry or exit?
[Dropdown: Click to select]
Will this restaurant’s demand curve shift left or right?
[Dropdown: Click to select]
**c.** Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. What is the size of the firm’s economic profit?
[Answer Box]
**d.** Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. Is the deadweight loss for this firm greater than or less than $60?
[Dropdown: Click to select]
---
**Notes on Graphs and Diagrams:**
This problem set does not include graphs or diagrams. Instead, it requires calculations and conceptual understanding in order to answer questions about profit/loss, market entry/exit, and economic efficiency in a monopolistically competitive market.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 3 images
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education