5. Suppose there are 10 monopolistically competitive restaurants in your town with identical costs. Given the following information, calculate the short-run price and quantity produced by each of the firms.

a. Would the price rise or fall at the typical firm in the long run? Explain.

b. What would be the level of production if this industry were a competitive industry?

c. If there is free entry and exit in both monopolistic competition and competition, why is there a difference in the quantity the typical firm produces?

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Each Firm's Demand Each Firm's Costs Quantity Price Average Total Cost Marginal Cost 10.00 12 - 6621 2.00 10 14 29890 8.00 6.00 4.00 12345