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

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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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
Transcribed Image Text: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
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