Last entry point of new firms into the monopolistic competitive market.

Question

In monopolistic competition,a firm produces 10,000 units when its marginal revenue equals its marginal cost. At this level of output, the firms average variable cost is $4.30 and its average fixed cost is $2.10. If the firm sells the product for $5 each, at best it is earning a. losses of $7,000. b. a profit of $7,000. c. losses of $14,000. d. a profit of $14,000. e. There is not enough information provided to answer this question.

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Question

Chapter 10, Problem 6SQ

To determine

Last entry point of new firms into the monopolistic competitive market.

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In monopolistic competition,a firm produces 10,000 units when its marginal revenue equals its marginal cost. At this level of output, the firms average variable cost is $4.30 and its average fixed cost is $2.10. If the firm sells the product for $5 each, at best it is earning a. losses of $7,000. b. a profit of $7,000. c. losses of $14,000. d. a profit of $14,000. e. There is not enough information provided to answer this question.

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