Why is there a price markup over marginal cost in monopolistic competition? Price and cost (dollars per raft) 750- 675- 600- There is a price markup over marginal cost in monopolistic competition because at the profit-maximizing quantity 525- 450- D A. marginal cost is less than average total cost 375- B. price equals marginal revenue, and with 300- a downward-sloping demand curve, price exceeds marginal cost 225- C. marginal revenue equals marginal cost and with a downward-sloping demand curve, price exceeds marginal revenue D. the average total cost curve is downward sloping The graph shows the demand curve and marginal revenue curve of Whitewater, Inc., a producer of rubber rafts in monopolistic competition. Draw the marginal cost curve if the firm produces 150 rafts a week. Label it. Draw a point at the intersection of the MC and MR curves. Draw a point to show the price that Whitewater charges for a raft when it produces 150 rafts a week. Draw an arrow to show the amount of Whitewater's markup. Quantity (rafts per week) >>> Draw only the objects specified in the question. 150- MR 75- E 0- 0 50 100 150 200 250

Why is there a price markup over marginal cost in monopolistic competition? Price and cost (dollars per raft) 750- 675- 600- There is a price markup over marginal cost in monopolistic competition because at the profit-maximizing quantity 525- 450- D A. marginal cost is less than average total cost 375- B. price equals marginal revenue, and with 300- a downward-sloping demand curve, price exceeds marginal cost 225- C. marginal revenue equals marginal cost and with a downward-sloping demand curve, price exceeds marginal revenue D. the average total cost curve is downward sloping The graph shows the demand curve and marginal revenue curve of Whitewater, Inc., a producer of rubber rafts in monopolistic competition. Draw the marginal cost curve if the firm produces 150 rafts a week. Label it. Draw a point at the intersection of the MC and MR curves. Draw a point to show the price that Whitewater charges for a raft when it produces 150 rafts a week. Draw an arrow to show the amount of Whitewater's markup. Quantity (rafts per week) >>> Draw only the objects specified in the question. 150- MR 75- E 0- 0 50 100 150 200 250

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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