**Microeconomics 2463 Assignment Part 1 – Chapter 15****Name:** ___________________________The market for toothpaste is a monopolistically competitive market. The graph below depicts the demand and marginal revenue curves for this market and the marginal cost and average total cost curves of a monopolistically competitive supplier.**Graph Explanation:**- **X-Axis:** Quantity (thousands of tubes)- **Y-Axis:** Price- **Curves Present:** - **Demand Curve**: Downward sloping, indicating the relationship between price and quantity demanded. - **MR (Marginal Revenue) Curve**: Downward sloping, below the demand curve, representing additional revenue from selling one more unit. - **MC (Marginal Cost) Curve**: Upward sloping, indicating the cost of producing one more unit. - **ATC (Average Total Cost) Curve**: U-shaped, indicating the average cost per unit at different production levels.**Using the above chart, identify the profit-maximizing quantity of toothpaste that the monopolistically competitive firm should produce, and the per-tube price that it should charge.**a. **Quantity (chart is in thousands) __________________**b. **Price at the Q in a. _____________________________**c. **TR (P x Q) _____________________________________**d. **TC (ATC x Q) ___________________________________**e. **Profit (TR - TC) ________________________________**f. **What will happen in this industry in the long-run based on profits in part e?**g. **What will happen to the demand curve for this particular firm in the long-run based on part f?**

Monopolistically competitive market can be defined as a market situation in which there are many…

The market for toothpaste is a monopolistically competitive market. The graph below depicts the demand and marginal revenue curves for this market and the marginal cost and average total cost curves of a monopolistically competitive supplier. Price $10.50 $9.00 $7.50 $6.00 $4.50 $3.00 $1.50 20 b. Price at the Q in a. c. TR (PxQ). 40 60 MR MC ATC: Demand Using the above chart, identify the profit-maximizing quantity of toothpaste that the monopolistically competitive firm should produce, and the per-tube price that it should charge. a. Quantity (chart is in thousands) 80 100 140 120 Quantity (thousands of tubes)

The market for toothpaste is a monopolistically competitive market. The graph below depicts the demand and marginal revenue curves for this market and the marginal cost and average total cost curves of a monopolistically competitive supplier. Price $10.50 $9.00 $7.50 $6.00 $4.50 $3.00 $1.50 20 b. Price at the Q in a. c. TR (PxQ). 40 60 MR MC ATC: Demand Using the above chart, identify the profit-maximizing quantity of toothpaste that the monopolistically competitive firm should produce, and the per-tube price that it should charge. a. Quantity (chart is in thousands) 80 100 140 120 Quantity (thousands of tubes)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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