The diagram at right shows the structure of cost and demand facing a monopolisticallycompetitive firm in the short run.The profit-maximizing output level is units of output. (Enter your response as an integer.)The profit-maximizing price is $. (Enter your response as an integer.)Total revenue is $ (Enter your response as an integer.)Total cost is $. (Enter your response as an integer.)Total profit or loss is $ (Enter your response as an integer and include a negative signwhere appropriate.)In the long run, firms willOA. exit, shifting the demand facing the remaining firms to the right until the firms earn aneconomic profit.B. exit, shifting the demand facing the remaining firms to the right until the firms earn anormal profit.OC. enter, shifting the demand facing the remaining firms to the left until the firms earn anormal profit.OD. enter, shifting the demand facing the remaining firms to the left until the firms earn aneconomic profit.$14$13$12$11$7MR1520QuantityMCDATC

A monopolistically competitive firm maximizes profit when it produce that level of output…

Answered: The diagram at right shows the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You are the manager of a monopolistically competitive firm. The present demand curve you face is P = 100 – 4Q. Your cost function is C(Q) = 50 + 8.5Q2. What level of output should you choose to maximize profits? What price should you charge? What will happen in your market in the long run? Explain.
Can you answer this
An international airline in Ghana ,Emirates ,estimates that the price elasticity of demand for business who travellers weekdays is -3,while that for vacation travellers who travel on weekends is -5 .if the aim of the airline is to maximise profit what pricing strategy will you recommend to the airline and why?
The demand and total cost functions for a monopolistically competitive market are: Q(P) = 300/N – P, where N = number of firms TC(Q) = 50 + Q2 There are currently three firms in this market and they are in a short run equilibrium. c) In the long run, how many firms are in the market (round to the nearest integer)?
Some years ago, two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, wanted to merge. One possible definition of the market in this case was “the market for intercity bus service.” Another possible definition was “the market for intercity transportation, including personal cars, car rentals, passenger trains, and commuter air flights.” Which definition do you think the bus companies preferred, and why?
Spike the Bulldog is the only seller of Zagopoly board games in Spokane. The inverse demand curve for this game is given by P = 40 – 0.5Q, where Q is in hundreds of games per month. Spike's marginal cost of producing board games is 7 + 0.1Q. a. If Spike cannot price-discriminate, what is his profit-maximizing level of output? What is his profit-maximizing price? b. How much consumer surplus will buyers of the board game receive? How much producer surplus will end up in Spike's pockets? How much deadweight loss is created by the board game monopoly? c. Suppose Spike is a magnificent salesman, able to discern perfectly his customers' willingness to pay. If he leverages this information to begin perfectly price discriminating, how many board games will he sell? d. How much surplus will buyers receive from a perfectly price- discriminating Spike? How much producer surplus will Spike capture? What will the deadweight loss due to monopoly be?
MelCo’s Xamoff The global pharmaceuticals giant, MelCo, has had great success with Xamoff, and over-thecounter medicine that reduces exam-related anxiety. A patent currently protects Xamoff from competition, although rumors persist that similar products are in development. Two years ago, MelCo sold 25 million units for a price of $10 for a package of ten. Last year it raised the price to $11, and sales fell to 22 million units. Finally, a financial analyst estimates the cost of production at $2 per package. (a) Estimate the elasticity of demand for this product at $10. Is this price too high or too low? (b) Estimate the elasticity of demand for this product at $11. Is this price too high or too low? (c) Based on your answers to (a) and (b), what can we say about MelCo’s profit-maximizing price?
Which of the following is not ever considered a cost of advertising from society's perspective? Decreased government revenue Waste of resources Misleading of vulnerable people Decreased competition
The following table contains different consumers' values for three software titles: PowerPoint, Excel, and Word. Suppose there are 100 consumers of each type. It costs Microsoft $0 to produce each piece of software. Consumer Types Administrative Assistants Marketing/Sales Accountants Price per each Profit on just that software PowerPoint Total profit on all software $76 $200 $25 A la carte pricing If Microsoft were to sell each of the software individually, what price should it set for each and what would its profits on each be? PowerPoint Excel $100 $100 $250 $ Word $200 $125 $25 Excel Word Bundled Pricing If Microsoft were to only sell the three products as a bundle, what price should they set for bundle and what would profits be? Bundled Price $ Total Profit S Mixed Pricing Suppose that Microsoft offered a bundle of all three for $375, but it also offers a price of $200 for each software separately. What is the new profit level for this pricing scheme?$ Is this mixed-pricing scheme…
Website Profit The latest demand equation for your gaming website, www.mudbeast.net, is given by q=-100x + 1500 where q is the number of users who log on per month and x is the log-on fee you charge. Your Internet provider bills you as follows. Site maintenance fee: $50 per month High-volume access fee: $0.50 per log-on Find the monthly cost as a function of the log-on fee x. C(x): = X Find the monthly profit as a function of x. P(x) = Determine the log-on fee you should charge (in dollars) to obtain the largest possible monthly profit. x = $ per log-on What is the largest possible monthly profit (in dollars)? $
Andrea's Day Spa began to offer a relaxing aromatherapy treatment. The firm asks you how much to charge to maximize profits. The demand curve for the treatments is given by the first two columns in the following table; its total costs are given in the third column. For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost. What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits? Price $25.00 0 $24.00 $23.00 Quantity TC $21.60 10 $22.50 30 $21.20 20 $22.00 40 50 60 $130 $275 $435 $610 $800 $1,005 $1,225 Total revenue Marginal revenue Average cost Marginal cost
Aa4. Phoenix Dubai is a small shop that has been operating in the United Arab Emirates for several years. The owner, Mrs. Cornelia Alphonce has decided that it is time for her to decrease the prices of all the goods in the shop in order to maximize revenue. What information should the owner base on this decision?

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS