(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC'. Suppose further that after the innovation reduced the cost to ATC', it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be: a. $1,190. b. $3,400. c. $1,700. d . $3,060.
(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC'. Suppose further that after the innovation reduced the cost to ATC', it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be: a. $1,190. b. $3,400. c. $1,700. d . $3,060.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
Section: Chapter Questions
Problem 6E
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Only typed answer and don't use chatgpt otherwise I will downvote the answer
Reference: Ref 11-2
(Exhibit: Profit Maximization for a Firm in
a. $1,190.
b. $3,400.
c. $1,700.
d
. $3,060.
![Price and cost
$40
30
23
20
10
0
Reference: Ref 11-2
MR
MC
150 200
ATC
ATC
AR=D
Quantity per day
(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) S
fixed costs and reduces cost from ATC to ATC'. Suppose further that af
it costs a total of $18 per unit to produce 170 units per day. If the firm
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Transcribed Image Text:Price and cost
$40
30
23
20
10
0
Reference: Ref 11-2
MR
MC
150 200
ATC
ATC
AR=D
Quantity per day
(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) S
fixed costs and reduces cost from ATC to ATC'. Suppose further that af
it costs a total of $18 per unit to produce 170 units per day. If the firm
net profit will be:
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