A monopolistic competitor has the following information about cost and demand. QuantityPrice ($)Total Revenue($)Marginal Revenue($)Total Cost ($)Marginal Cost ($)Average Cost($)2244823352.517.5423922145511.2562213219607.51082116817778.59.6310202001510011.5101219228131261310.514182521116519.511.791617272921022.513.13181628872602514.44201530053203016 What will the firm’s profits equal in the short run? Question 6 options: 0 $91 $102 $229

In a monopolistic competitive market there are large number of firms producing similar but not identical products thus having some market power. Hence, it will produce at the output level where MC=MR in order to maximize profit in the short run. Thus it will produce 12 units in order to maximize profit. Thus economic profit = TR12 - TC12 = 228-126 = $ 102 ... option (c)

Answered: monopolistic competitor has the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A monopolistic competitor has the following information about cost and demand.

Quantity	Price ($)	Total Revenue ($)	Marginal Revenue ($)	Total Cost ($)	Marginal Cost ($)	Average Cost($)
2	24	48	23	35	2.5	17.5
4	23	92	21	45	5	11.25
6	22	132	19	60	7.5	10
8	21	168	17	77	8.5	9.63
10	20	200	15	100	11.5	10
12	19	228	13	126	13	10.5
14	18	252	11	165	19.5	11.79
16	17	272	9	210	22.5	13.13
18	16	288	7	260	25	14.44
20	15	300	5	320	30	16

What will the firm’s profits equal in the short run?

Question 6 options:

	0
	$91
	$102
	$229

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