The graph shows the demand, marginal revenue, marginal cost, and average total cost curves of La Bella Pizza, a firm in monopolistic competition Draw a point at the firm's profit-maximizing price and quantity. Label it 1. Draw a point at minimum average total cost. Label it 2. Draw a vertical arrow that shows the firm's markup. Label it Markup. Draw a horizontal arrow that shows the firm's excess capacity. Label it Excess capacity. La Bella's markup is $ a pizza. La Bella's excess capacity is The market is in equilibrium because O A. short-run; the quantity produced is less than the efficient scale O B. long-run; economic profit is zero O C. long-run; the quantity produced is the quantity at which marginal cost equals marginal revenue O D. long-run; price exceeds marginal revenue pizzas. 16.00- 14.00- 12.00- 10.00- 8.00- 6.00+ 0 Price (dollars per pizza) Q MC Q 50 ATC D MR 100 150 200 Quantity (pizzas per day) >>> Draw only the objects specified in the question. 250

The graph shows the demand, marginal revenue, marginal cost, and average total cost curves of La Bella Pizza, a firm in monopolistic competition Draw a point at the firm's profit-maximizing price and quantity. Label it 1. Draw a point at minimum average total cost. Label it 2. Draw a vertical arrow that shows the firm's markup. Label it Markup. Draw a horizontal arrow that shows the firm's excess capacity. Label it Excess capacity. La Bella's markup is $ a pizza. La Bella's excess capacity is The market is in equilibrium because O A. short-run; the quantity produced is less than the efficient scale O B. long-run; economic profit is zero O C. long-run; the quantity produced is the quantity at which marginal cost equals marginal revenue O D. long-run; price exceeds marginal revenue pizzas. 16.00- 14.00- 12.00- 10.00- 8.00- 6.00+ 0 Price (dollars per pizza) Q MC Q 50 ATC D MR 100 150 200 Quantity (pizzas per day) >>> Draw only the objects specified in the question. 250

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 11PAE

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Draw a diagram of the long-run equilibrium in a monopolistically competitive market. How is price related to average total cost? How is price related to average total cost? How is price related to marginal cost?
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