5 . How short-run profit or losses induce entniIr or exit Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The foIIoWing graph shows the demand cu rve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. Place the black point {' plus symbol) on the graph to indicate the shortrun profitmaximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle ( triangle symbols) to shade the area representing the company's prot or loss. Place the black point ( plus symbol) on the graph to indicate the shortrun protmaximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle [' triangle symbols) to shade the area representing the company's profit or loss. /'\\ K?) 500 -- 450 400 Monopolistically Competitive Outcome 350 ATC Prot or Lose 300 250 200 PRICE (Dollars per scooter) 150 100 5E] MR Demand- _ U : : : : : : : . . U 50 100 150 200 250 300 350 400 450 500 QUANTITY (Scooters) Given the profitmaximizing choice of output and price, Citrus Scooters is earning Y prot, which means there are 7 sellers in the industry relative to the longrun equilibrium amount. Now consider the long run in which scooter manufacturers are free to enter and exit the market. Show the possible effect of this free entry and exit by shifting the demand curve for a typical individual producer of scooters on the following graph. 6') Demand PRICE (Dollars par scooter) Demand QUANTITY {Scooters} Which of the following statements are true for both monopolistically competitive markets and monopoly markets? Check all that apply. O Price is above marginal cost. Price equals average total cost in the long run. Firms are not price takers. Firms can earn positive profit in the long run