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Question 15 The graph shows the marginal cost curve, average total cost curve, demand curve, and marginal revenue curve of a firm in monopolistic competition in long-run equilibrium. Draw a point at the firm's profit-maximizing output and price. Label it 1. Draw a point to show the firm's efficient scale and its average total cost at that output. Label it 2. Draw a horizontal arrow that indicates the firm's excess capacity. Label it. Price and cost (dollars per pair) 50- 40- 30- 20- 10- 0- MR D 100 50 150 Quantity (pairs of blue jeans per day) MC ATC 200

Question 15 The graph shows the marginal cost curve, average total cost curve, demand curve, and marginal revenue curve of a firm in monopolistic competition in long-run equilibrium. Draw a point at the firm's profit-maximizing output and price. Label it 1. Draw a point to show the firm's efficient scale and its average total cost at that output. Label it 2. Draw a horizontal arrow that indicates the firm's excess capacity. Label it. Price and cost (dollars per pair) 50- 40- 30- 20- 10- 0- MR D 100 50 150 Quantity (pairs of blue jeans per day) MC ATC 200

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 15 The graph shows the marginal cost curve, average total cost curve, demand curve, and marginal revenue curve of a firm in monopolistic competition in long-run equilibrium. Draw a point at the firm's profit-maximizing output and price. Label it 1. Draw a point to show the firm's efficient scale and its average total cost at that output. Label it 2. Draw a horizontal arrow that indicates the firm's excess capacity. Label it. Price and cost (dollars per pair) 50- 40- 30- 20- 10- MR D 50 100 150 Quantity (pairs of blue jeans per day) MC ATC 200
Transcribed Image Text:Question 15 The graph shows the marginal cost curve, average total cost curve, demand curve, and marginal revenue curve of a firm in monopolistic competition in long-run equilibrium. Draw a point at the firm's profit-maximizing output and price. Label it 1. Draw a point to show the firm's efficient scale and its average total cost at that output. Label it 2. Draw a horizontal arrow that indicates the firm's excess capacity. Label it. Price and cost (dollars per pair) 50- 40- 30- 20- 10- MR D 50 100 150 Quantity (pairs of blue jeans per day) MC ATC 200
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