The graph below summarizes the demand and costs for a firm that operates in a monopolistically competitive market. Instruction: Use the nearest whole numbers on the graph when calculating numerical responses below. a. What is the firm’s optimal output? units b. What is the firm’s optimal price? $ c. What are the firm’s maximum profits? $ d. What adjustments should the manager be anticipating? multiple choice Demand will decrease over time as new firms enter the market. Demand will increase over time as firms exit the market. Demand will remain unchanged over time.
The graph below summarizes the demand and costs for a firm that operates in a monopolistically competitive market. Instruction: Use the nearest whole numbers on the graph when calculating numerical responses below. a. What is the firm’s optimal output? units b. What is the firm’s optimal price? $ c. What are the firm’s maximum profits? $ d. What adjustments should the manager be anticipating? multiple choice Demand will decrease over time as new firms enter the market. Demand will increase over time as firms exit the market. Demand will remain unchanged over time.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
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The graph below summarizes the demand and costs for a firm that operates in a monopolistically competitive market.
Instruction: Use the nearest whole numbers on the graph when calculating numerical responses below.
a. What is the firm’s optimal output?
units
b. What is the firm’s optimal price?
$
c. What are the firm’s maximum profits?
$
d. What adjustments should the manager be anticipating?
multiple choice
Instruction: Use the nearest whole numbers on the graph when calculating numerical responses below.
a. What is the firm’s optimal output?
units
b. What is the firm’s optimal price?
$
c. What are the firm’s maximum profits?
$
d. What adjustments should the manager be anticipating?
multiple choice
-
Demand will decrease over time as new firms enter the market.
-
Demand will increase over time as firms exit the market.
-
Demand will remain unchanged over time.
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22 24 26
Quantity
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Expert Solution
Step 1
A monopolistic market is a market where heterogeneous products are available in the market. There are number of buyers and sellers exist in the market. A firm can enter and exit the market in the long run time period.
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