Answered: The following graph shows a firm…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following graph shows a firm operating in a monopolistically competitive market. Short term, how many haircuts will the firm perform and at what price? At this point, what will its total revenue, total cost, and total profit be? Given your answers, what would we expect to happen in the long term in this market (i.e. are we at long term equilibrium, or will we see further changes)?

1. The following graph shows a firm operating in a monopolistically competitive market. Short term, how
many haircuts will the firm perform and at what price? At this point, what will its total revenue, total
cost, and total profit be? Given your answers, what would we expect to happen in the long term in this
market (i.e. are we at long term equilibrium, or will we see further changes)?
Costs and
revenue
(dollars
per haircut)
$25
21
14
O
110
140
MR
MC
ATC
Demand
Quantity
(haircuts
per week)

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