Monopolistic Competition Consider the fotlowing graph, (graph 1) for the short run equilibrium for a monopolisticatly competitive firm producing printers for commercial operations. Graph1 $ Price per unit P1 ATC MC P2 Pa D3 D2 Q2 Q1 Q3 Quantity MR2 MR. The following information is given: D1 = $35,000- $15Q TC = $550,000 + $1,000Q+ $10Q? Answer the following and referring to the relevant elements of graph 1 above and show all workings, (a) Calculate price output and profit for the short run equilibrium (show all workings). (b) Calculate price, outputand profit for the long run equilibrium (with and without product differentiation) (show all workings). (c) Is the market allocatively efficient in the short run or long run (why or why not?). (d) Is the market productively efficient in the short run or long run (why or why not?).
Monopolistic Competition Consider the fotlowing graph, (graph 1) for the short run equilibrium for a monopolisticatly competitive firm producing printers for commercial operations. Graph1 $ Price per unit P1 ATC MC P2 Pa D3 D2 Q2 Q1 Q3 Quantity MR2 MR. The following information is given: D1 = $35,000- $15Q TC = $550,000 + $1,000Q+ $10Q? Answer the following and referring to the relevant elements of graph 1 above and show all workings, (a) Calculate price output and profit for the short run equilibrium (show all workings). (b) Calculate price, outputand profit for the long run equilibrium (with and without product differentiation) (show all workings). (c) Is the market allocatively efficient in the short run or long run (why or why not?). (d) Is the market productively efficient in the short run or long run (why or why not?).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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please answer part c and d.
Transcribed Image Text:Monopolistic Competition
Consider the folowing graph, (graph 1) for the short run equilibrium for a monopolisticaily
competitive firm producing printers for commercial operations.
Graph1
$ Price
per
unit
P1
ATC
MC
P2
Pa
D3
D2
D3
Q2
Qu
Q3
Quantity
MR2
MR.
The following information is given:
D1 = $35,000- $15Q
TC = $550,000+ $1,000Q+ $10Q?
Answer the following and referring to the relevant elements of graph 1 above and show all workings.
(a) Calculate price output and profit for the short run equilibrium (show all workings).
(b) Calculate price, output and profit for the long run equilibrium (with and without product
differentiation) (show all workings).
(c) Is the market allocatively efficient in the short run or long run (why or why not?).
(d) Is the market productively efficient in the short run or long run (why or why not?).
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