estion 8 of 16Consider the demand and cost curves for Old Balance runningPrice per pairAverage total costshoes, a monopolistically competitive firm. Assume that themarket for running shoes is in long-run equilibrium and$200190answer the questions.180170Marginal costCalculate Old Balance's markup.160150140130120110100908070Marginal revenue60Calculate Old Balance's excess capacity.50Demand40302010excess capacity:pairs of shoes1 234 5 6 78 910Pairs of shoes (thousands)

In monopolistic competition, profit is maximized at MR = MC. In the long run, the firm earns zero…

estion 8 of 16 Consider the demand and cost curves for Old Balance running Price per pair Average total cost shoes, a monopolistically competitive firm. Assume that the market for running shoes is in long-run equilibrium and $200 190 answer the questions. 180 Marginal cost 170 Calculate Old Balance's markup. 160 150 140 130 120 110 $ 100 90 80 70 Marginal revenue 60 Calculate Old Balance's excess capacity. 50 Demand 40 30 20 10 excess capacity: pairs of shoes 1 2 3 4 6 7 8 9 10 Pairs of shoes (thousands)

estion 8 of 16 Consider the demand and cost curves for Old Balance running Price per pair Average total cost shoes, a monopolistically competitive firm. Assume that the market for running shoes is in long-run equilibrium and $200 190 answer the questions. 180 Marginal cost 170 Calculate Old Balance's markup. 160 150 140 130 120 110 $ 100 90 80 70 Marginal revenue 60 Calculate Old Balance's excess capacity. 50 Demand 40 30 20 10 excess capacity: pairs of shoes 1 2 3 4 6 7 8 9 10 Pairs of shoes (thousands)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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