oiowhat el Figure#4: 450 . 1.50 1.00 Quensity (units per hou) 27, Refer to Figur

Question

oiowhat el Figure#4: 450 . 1.50 1.00 Quensity (units per hou) 27, Refer to Figure#4. This figure depicts a situation in a monopolistically competitive market. What price will the monopolistically competitive firm charge in this market, in the short-run? b.$4 c. $5. d. $6. 28 Refer to Figure#4. This figure depicts a situation in a monopolistically competitive market. How much the output will the monopolistically competitive firm produce in this situation, in the short-run? a. 4 units. b. 5 units. c. 6 units d. No output, since producing in this situation will result in a loss for the firm. 29 Refer to Figure#4. Producing its output at the profit maximization, the firm in this figure has total costs of approximately a. $14. b. $16. c. $20 d. undetermined with given in formation. 30. Which of the following best describes the idea of excess capacity in monopolistic competition? a. Due to product differentiation, firms choose output levels where P> ATC. b. Firms keep some surplus output on hand in case there is a shift in the demand for their product. c. The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve d. The output produced by a typical firm is greater than what would occur at the minimum point on its ATC curve greater than what would occur at the minimum point on its ATC curve.

Explanation / Answer

Q27
Answer
The firm produces at MR=MC, and find price from demand curve at the production
P=$5
option c
Q28
Answer
output at MR=MC is Q=4 units
Option a
Q29
Answer
TC=ATC*Q=4*4=$16
Option b
Q30
Answer
option c
the firm produces at P=ATC but the P>min(ATC)

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