Question 8 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. Price $30 $26 $22 $18 $14 $10 $6 Quantity 1 2 3 4 5 6 7 If the firm produces its profit-maximizing level of output and there is a constant marginal cost of $7 per unit, which of the following is incorrect? This firm is not operating at its efficient scale. This firm charges a price of $22 to maximize its profit. This firm earns $25 profit at the profit-maximizing level of output. This firm is in a long-run equilibrium.
Question 8 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. Price $30 $26 $22 $18 $14 $10 $6 Quantity 1 2 3 4 5 6 7 If the firm produces its profit-maximizing level of output and there is a constant marginal cost of $7 per unit, which of the following is incorrect? This firm is not operating at its efficient scale. This firm charges a price of $22 to maximize its profit. This firm earns $25 profit at the profit-maximizing level of output. This firm is in a long-run equilibrium.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 13CQ
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![Question 8
A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20.
Price
$30
$26
$22
$18
$14
$10
$6
Quantity
1
2
4
6
7
If the firm produces its profit-maximizing level of output and there is a constant marginal cost of $7 per unit, which of the following is incorrect?
This firm is not operating at its efficient scale.
This firm charges a price of $22 to maximize its profit.
This firm earns $25 profit at the profit-maximizing level of output.
This firm is in a long-run equilibrium.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3da6a9b5-7998-4396-aa60-dfb0cab5d801%2Ff3616031-81f1-46d4-a063-b75432c7e091%2Fnn1q9ixs_processed.png&w=3840&q=75)
Transcribed Image Text:Question 8
A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20.
Price
$30
$26
$22
$18
$14
$10
$6
Quantity
1
2
4
6
7
If the firm produces its profit-maximizing level of output and there is a constant marginal cost of $7 per unit, which of the following is incorrect?
This firm is not operating at its efficient scale.
This firm charges a price of $22 to maximize its profit.
This firm earns $25 profit at the profit-maximizing level of output.
This firm is in a long-run equilibrium.
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