6 Sparkle is one of the many firms in the market for toothpaste, which is in long-run...
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6 Sparkle is one of the many firms in the market for toothpaste, which is in long-run equilibrium.
a Draw a diagram showing Sparkle's demand curve, marginal-revenue curve, averagetotal-cost curve and marginal-cost curve. Label Sparkle's profit-maximising output and price.
b What is Sparkle's profit? Explain.
c On your diagram, show the consumer surplus derived from the purchase of Sparkle toothpaste. Also show the deadweight loss relative to the efficient level of output.
d If the government forced Sparkle to produce the efficient level of output, what would happen to the firm? What wou ld happen to Sparkle's customers?
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Related Book For
Principles Of Microeconomics
ISBN: 125206
8th Edition
Authors: Joshua Gans, Stephen King, Martin Byford, N Gregory Mankiw
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