The above figure shows cost and demand curves for a monopolistically competitive

Question

The above figure shows cost and demand curves for a monopolistically competitive producer of iced-tea.

a. What is the profit-maximizing output level?

b. What is the profit-maximizing price?

c. At the profit-maximizing output level, how much profit will be realized?

The above figure shows cost and demand curves for a monopolistically competitive producer of iced-tea. What is the profit-maximizing output level? What is the profit-maximizing price? At the profit-maximizing output level, how much profit will be realized?

Explanation / Answer

ANS1.- 22 where MC=MR

ans2.-16 PRICE IS EQUAL TO AR

ans- 88 =[(16-12=4)*22]

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