2. Suppose that a restaurant in an oligopolistic part of that industry is currently serving 230 meals per day (the output where MR  MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal.

What is the size of this firm’s profit or loss? Will there be entry or exit? Will this restaurant’s demand curve shift left or right? In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. What is the size of the firm’s profit? LO3