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
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 11PAE
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![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7fb65886-605a-4486-aa23-56d9b3d5dd25%2F12277421-56ef-475b-bc32-11fb98c99db6%2Fe3ef2cm_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
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