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5 . How short-run profit or losses induce entry or exit Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market.
5 . How short-run profit or losses induce entry or exit Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand curve, 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 short-run profit-maximizing 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. 500 450 Monopolistically Competitive Outcome 400 350 300 ATC Profit or Loss PRICE (Dollars per scooter) 250 200 150 100 50 MC MR Demand 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Scooters) Given the profit-maximizing choice of output and price, Citrus Scooters is earning profit, which means there are sellers in the industry relative to the long-run equilibrium amount
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