Question
1.A monopolistic competitor in the differentiated smartphone industry faces the following daily demand: P=1100-100Q and marginal revenue: MR=1100-200Q.Average and marginal costs are constant at $100
1.A monopolistic competitor in the differentiated smartphone industry faces the following daily demand: P=1100-100Q and marginal revenue: MR=1100-200Q.Average and marginal costs are constant at $100 (ATC=MC=$100 and TC=100Q).
a.(5 points) Draw the Demand, Marginal Revenue, and Marginal Cost curves on a clearly labeled axes.
b.(5 points) Find the output chosen by the monopolistic competitor facing these conditions.What is the decision rule they use to choose this output?
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Using Econometrics A Practical Guide
Authors: A. H. Studenmund
7th edition
013418274X, 978-0134182742
