How short-run profit or losses induce entry or exitFantastique Bikes is a company that manufactures bikesin a monopolistically competitive market. The followinggraph shows Fantastique's demand curve, marginalrevenue curve (MR), marginal cost curve (MC), andaverage total cost curve (ATC).2. How short-run profit or losses induce entry or exitFantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demandcurve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC).Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitivecompany. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss500400350300ATC250*200150100MOMR4505030PRICE (Dollars per l0DemandA0 50 100 150 200 250 300 350 400 450 500QUANTITY (Bikes)Given the profit-maximizing choice of output and price, the shop is making+Monopolistically Competitive Outcome✰✰Proft or Lossshops in the industry relative to the long-run equilibrium.QUANTITY (Bikes)Now consider the long run in which bike manufacturers are free to enter and exit the market.Show the possible effect of this free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph.Demandprofit, which means there areDemand Which of the following statements are true about both monopolistic competition and monopolies? Check all that apply.Firms are not price takers.Firms can earn positive profit in the long run.Firms earn zero profit in the long run.Price is above marginal cost.

Marginal revenue is a central concept in microeconomics that describes the additional total revenue…

Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss

Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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