The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopolistically competitive firm are shown in the figure below. Instructions: Use the tool provided 'Pt. A' to identify the profit-maximizing quantity and price. Price/Cost $50 MC $40 $30 $20 $10 D Tools - Pt. A ATC AVC MR 0 10 20 30 40 50 Quantity We know this firm is earning positive This indicates that this firm is not く profits because P= ATC in a long-run equilibrium.

The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopolistically competitive firm are shown in the figure below. Instructions: Use the tool provided 'Pt. A' to identify the profit-maximizing quantity and price. Price/Cost $50 MC $40 $30 $20 $10 D Tools - Pt. A ATC AVC MR 0 10 20 30 40 50 Quantity We know this firm is earning positive This indicates that this firm is not く profits because P= ATC in a long-run equilibrium.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter14: Monopolistic Competition And Product Differentiation

Section: Chapter Questions

Problem 10P

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