The graph shows the cost curves, demand curve, and marginal revenue curve of afirm in monopolistic competition.Price and cost (dollars per crate)120-MCHow does this firm maximize economic profit?100-What is economic profit?80-This firm maximizes profit by producinga crate.crates a day and setting the priceATCat60-O A. 175; $65О В. 150; $40ОС. 150; $70O D. 175; $9040-20-MREconomic profit is Sa day.25 50 75 100 125 150 175 200 225 250 275 300Quantity (crates per day)to

Profit maximizing quantity would be determined where MR=MC So the quantity would be 150. At…

The graph shows the cost curves, demand curve, and marginal revenue curve of a firm in monopolistic competition. Price and cost (dollars per crate) 120- MC How does this firm maximize economic profit? 100- What is economic profit? This firm maximizes profit by producing. a crate. crates a day and setting the price 80- ATC at 60- O A. 175; $65 O B. 150; $40 OC. 150; $70 O D. 175; $90 40- 20- MR Economic profit is S a day. 0- 25 50 75 100 125 150 175 200 225 250 275 300 Quantity (crates per day)

The graph shows the cost curves, demand curve, and marginal revenue curve of a firm in monopolistic competition. Price and cost (dollars per crate) 120- MC How does this firm maximize economic profit? 100- What is economic profit? This firm maximizes profit by producing. a crate. crates a day and setting the price 80- ATC at 60- O A. 175; $65 O B. 150; $40 OC. 150; $70 O D. 175; $90 40- 20- MR Economic profit is S a day. 0- 25 50 75 100 125 150 175 200 225 250 275 300 Quantity (crates per day)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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PRICE Graph (a) MR QUANTITY MC ATC D PRICE Graph (b) MR QUANTITY Figure 17-4 MC ATC D Graph (c) MR QUANTITY MC ATC D Graph (d) QUANTITY Refer to Figure 16-4. Which of the graphs depicts a short-run equilibrium that will encourage the entry of other firms into a monopolistically competitive industry? O a. Graph (b) O b. Graph (d) O c. Graph (c) O d. Graph (a) MC ATC D
M10
Answer the question on the basis of the following short run demand and cost data for a specific firm. Cost Data (2) Price $ 80 76 Demand Data (1) Price 72 68 • decrease. • increase. $ 35 30 25 . 20 15 2 3 10 5 4 5 6 (3) Quantity 7 8 2 3 4 5 64 60 56 In the long run, the number of firms in this monopolistic competitive industry will most likely Multiple Choice 6 Total Output 7 8 Total Cost stay the same. The answer cannot be determined from the given data. $45 55 70 90 115 145 180
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2) What types of efficiency does the economic outcome under monopolistic competition lead to? Productive but not allocative efficiency Allocative but not productive efficiency Neither allocative, nor productive efficiency Both allocative and productive efficiency οιο οο
Q. 2
Dana is a dot-com entrepreneur who has established a Web site at which people can design and buy awatch. Dana pays $200 a month for a Web server and Internet connection. The watches that customers design are made to order by another firm, and Dana pays this firm $60 a watch. Dana has no other costs. The table shows the demand schedule for Dana's watches. What is Dana's profit-maximizing output, price, and economic profit? Dana's profit-maximizing output is Dana's profit-maximizing price is $ Dana's economic profit is $ a month. watches a month. a watch. Price (dollars per watch) 100 80 60 40 20 0 Quantity (watches per month) 0 20 40 60 80 100
$19 16 30 13 10 O 100 Multiple Choice 160180 210 Quantity loss of $320. profit of $480. MC Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. This firm will realize an economic profit of $280. profit of $600. MR ATC D
Number 51: A monopolistic firm's demand, MR, MC and ATC curves MC ATC P A A Quantity 1. How much output will this firm produce and what price will it charge if it wants to: maximize its total revenues? -maximize its profits? Multiple Choices for both: A. Q1 and P1 B. Q2 and P2 C. Q3 and P3 2. How much output will this firm produce and what price will it charge if it is mandated by the government to produce at the socially desirable or efficient output level? Q1 and P1 Q2 and P2 Choices: Q3 and P3 | 3. How much is the DWL that arises when this firm produces the profit maximizing output level? 1/2(P1-P2) (01-02) 1/2(P1-P3)(Q1-Q3) choices: 1/2(P1-P3)(01-02)
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The folowing diagram shows the curves for perceived demand, marginal revenue, and cost for Manuela's Pizza, which serves Mexican-style pizza. Manuela's is one of many other fast food restaurants in this town. MC Price and Cost ATC Demand Quantity of piezas Which statement describes the transibon to the long nun? Select the best answer. O More fast food restaurants will enter the market, and Manuela's demand curve will become more elastic. Manuela's will raise its prices since there is a large demand for its pizzas. O More fast food restaurants will enter the market, and Manuela's demand curve will become more inelastic. Manuela's will experience lower costs of production because it will expand its output.
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