**Question 7:** The graph below summarizes the demand and costs for a firm that operates under a monopolistically competitive market. **Instruction:** Use the nearest whole numbers on the graph when calculating numerical responses below. **Graph Explanation:** - The graph includes curves labeled MC (Marginal Cost), ATC (Average Total Cost), MR (Marginal Revenue), and D (Demand). - The vertical axis represents the price in dollars, ranging from $0 to $220. - The horizontal axis shows quantity, ranging from 0 to 26 units. **Questions:** a. What level of output should this firm produce in the short run? **Answer:** _______ units. b. What price should this firm charge in the short run? **Answer:** P = $_______. c. What is the firm’s total cost at this level of output? **Answer:** TC = _______. d. What is the firm’s profit if it produces this level of output? **Answer:** Profits = $_______. g. What adjustments should the manager be anticipating? (A, B, C, or D). A. Demand will remain unchanged over time. B. Demand will decrease over time as new firms enter the market. C. Demand will increase over time as firms exit the market. D. Demand will increase over time as new firms enter the market. **Answer:** _______.
**Question 7:** The graph below summarizes the demand and costs for a firm that operates under a monopolistically competitive market. **Instruction:** Use the nearest whole numbers on the graph when calculating numerical responses below. **Graph Explanation:** - The graph includes curves labeled MC (Marginal Cost), ATC (Average Total Cost), MR (Marginal Revenue), and D (Demand). - The vertical axis represents the price in dollars, ranging from $0 to $220. - The horizontal axis shows quantity, ranging from 0 to 26 units. **Questions:** a. What level of output should this firm produce in the short run? **Answer:** _______ units. b. What price should this firm charge in the short run? **Answer:** P = $_______. c. What is the firm’s total cost at this level of output? **Answer:** TC = _______. d. What is the firm’s profit if it produces this level of output? **Answer:** Profits = $_______. g. What adjustments should the manager be anticipating? (A, B, C, or D). A. Demand will remain unchanged over time. B. Demand will decrease over time as new firms enter the market. C. Demand will increase over time as firms exit the market. D. Demand will increase over time as new firms enter the market. **Answer:** _______.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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please answer parts c,d and g
Transcribed Image Text:**Question 7:**
The graph below summarizes the demand and costs for a firm that operates under a monopolistically competitive market.
**Instruction:** Use the nearest whole numbers on the graph when calculating numerical responses below.
**Graph Explanation:**
- The graph includes curves labeled MC (Marginal Cost), ATC (Average Total Cost), MR (Marginal Revenue), and D (Demand).
- The vertical axis represents the price in dollars, ranging from $0 to $220.
- The horizontal axis shows quantity, ranging from 0 to 26 units.
**Questions:**
a. What level of output should this firm produce in the short run?
**Answer:** _______ units.
b. What price should this firm charge in the short run?
**Answer:** P = $_______.
c. What is the firm’s total cost at this level of output?
**Answer:** TC = _______.
d. What is the firm’s profit if it produces this level of output?
**Answer:** Profits = $_______.
g. What adjustments should the manager be anticipating? (A, B, C, or D).
A. Demand will remain unchanged over time.
B. Demand will decrease over time as new firms enter the market.
C. Demand will increase over time as firms exit the market.
D. Demand will increase over time as new firms enter the market.
**Answer:** _______.
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