You're the manager of a firm that has constant marginal cost of $6. Fixed cost is zero. The market structure is monopolisticallycompetitive. You're faced with the following demand curve:$1210Price864203Demand100 200 300 400 500 600QuantityShow Transcribed Texta. Determine graphically the profit-maximizing price and output for your firm in the short run. Demonstrate what profit or loss you'll bemaking. (Please draw a graph)b. What happens in the long run?

A key idea in business and economics, marginal cost is the extra expense incurred when producing one…

Answered: You're the manager of a firm that has…

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
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The following graph characterizes a firm in a monopolistically competitive market. 32 24 18 16 12 8- ATC This show that the firm is 12 MC earing zero economic profits. producing 16 units of the good. in a long run equilibrium. in a short run position. MR 16 20 24 Demand 28 32 Q
The monopolistically competitive firm represented in the graph is in: $ $11.40 $10.20 $7.50 0 520 630 MC ATC Firm's Demand MR Quantity
The accompanying graph depicts average total cost (ATC) marginal cost (MC), marginal revenue (M), and demand (D) 50 facing a monopolistically competitive firm MC 45 Place point A at the firm's profit maximizing price and quantity 40 35 What is the firm's total cost? ATC 30 25 total cost: 20 15 What is the firm's total revenue? 10 5 total revenue: $ MR 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity What is the firm's total profit? profit: $ Price and Cost ($)
Price $1.40 $1.00 $0.95 $0.85 $0.60 MR MC ATC D 0 300 500 900 1000 Quantity The monopolistically competitive firm represented in the graph above is in: long-run equilibrium because economic profits are zero at the profit-maximizing output level. short-run equilibrium because price exceeds average total cost at the profit-maximizing output level. both short-run and long-run equilibrium because price exceeds average total cost at the profit-maximizing output level. O both short-run and long-run equilibrium because price equals marginal cost at the profit-maximizing output level.
Q. 2
do fast.
both
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You're the manager of a firm that has constant marginal cost of $6. Fixed cost is zero. The market structure is monopolistically competitive. You're faced with the following demand curve: $12 Price 10 8 9 4 2 O 3 Demand 100 200 300 400 500 600