PRICE (Dollars per bike) 500 450 400 350 300 250 - 200 150 100 50 MC 0 0 50 I AC MR Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes) Monopolistically Competitive Outcome Profit or Loss Given the profit-maximizing choice of output and price, the shop is earning positive profit, which means there are an equal number of shops in the industry than in long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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MindTa x
Login × Login X Bb Salt W X
m statican bruisevos index.hamladeploymentid=59400022675212682010495789084&elSBN=9781887912426&id=1639810498&snapshot d=32
CENGAGE MINDTAP
Homework: Between Competition and Monopoly
PRICE (Dollars per bike)
500
350
300
150
中興路
250 A
G
বন্ধ
Content X
MC
0
100
AC
MR
150
Demand
250 300 350
QUANTITY (Bikes)
400 450 500
Cenga X Cenga X M Inbox 12 %
Monopolistically Competitive Outcome
分会
Profit or Loss
Given the profit-maximizing choice of output and price, the shop is earning positive profit, which means there are
an equal number of shops in the industry than in long-run equilibrium.
Now consider the long run in which bike manufacturers are free to enter and exit the market.
Show the possible effect of free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph.
+
Q Sea
Transcribed Image Text:MindTa x Login × Login X Bb Salt W X m statican bruisevos index.hamladeploymentid=59400022675212682010495789084&elSBN=9781887912426&id=1639810498&snapshot d=32 CENGAGE MINDTAP Homework: Between Competition and Monopoly PRICE (Dollars per bike) 500 350 300 150 中興路 250 A G বন্ধ Content X MC 0 100 AC MR 150 Demand 250 300 350 QUANTITY (Bikes) 400 450 500 Cenga X Cenga X M Inbox 12 % Monopolistically Competitive Outcome 分会 Profit or Loss Given the profit-maximizing choice of output and price, the shop is earning positive profit, which means there are an equal number of shops in the industry than in long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. + Q Sea
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