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 horizontal arrow that shows the firm's excess capacity. Draw a shape to show deadweight loss. Label it DWL. The firm's excess capacity is pizzas a day. In the long run, the number of pizza producers OA. increases B. does not change OC. decreases - Price (dollars per pizza) 16.00- Q MC Q 14.00- 12.00- 10.00- 8.00- ATC D MR 6.00+ 0 50 100 150 200 Quantity (pizzas per day) 250 (0,14) >>> Draw only the objects specified in the question.
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 horizontal arrow that shows the firm's excess capacity. Draw a shape to show deadweight loss. Label it DWL. The firm's excess capacity is pizzas a day. In the long run, the number of pizza producers OA. increases B. does not change OC. decreases - Price (dollars per pizza) 16.00- Q MC Q 14.00- 12.00- 10.00- 8.00- ATC D MR 6.00+ 0 50 100 150 200 Quantity (pizzas per day) 250 (0,14) >>> Draw only the objects specified in the question.
Chapter14: Monopolistic Competition And Product Differentiation
Section: Chapter Questions
Problem 6P
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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 horizontal arrow that shows the firm's excess capacity.
Draw a shape to show deadweight loss. Label it DWL.
The firm's excess capacity is
pizzas a day.
In the long run, the number of pizza producers
OA. increases
B. does not change
OC. decreases
-
Price (dollars per pizza)
16.00-
Q
MC
Q
14.00-
12.00-
10.00-
8.00-
ATC
D
MR
6.00+
0
50
100 150 200
Quantity (pizzas per day)
250
(0,14)
>>> Draw only the objects specified in the question.
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