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1. The graph below shows the average cost, marginal cost, demand, and marginal revenue curves for a monopolistically competitive firm producing ladies dresses. (a) Find

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1. The graph below shows the average cost, marginal cost, demand, and marginal revenue curves for a monopolistically competitive firm producing ladies dresses. (a) Find the profit/loss for the firm. (b) Discuss the adjustment to the long run equilibrium. Price, cost Marginal cost and revenue Average cost (dollars per unit) 90 70 Demand Marginal revenue 0 7000 12000 Dresses (units per day)

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