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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Quinn runs an apple orchard in a monopolistically competitive market. Quinn is maximizing profits when they sell apples for $3 per pound, produce 12,000 pounds per year. This set up creates $36,000 in profit per year. Suppose Quinn increases their price to $5. This higher price will: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a increase profits. b not change profits. cause marginal revenue to exceed marginal cost. d cause marginal cost to exceed marginal revenue. Your answer
A. How does the demand curve faced by the firm in monopolistically competitive market differ from the demand curve faced by a firm participating in a purely competitive market? b. How does that impact how the firm sets its price and the quantity the firm produces?
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