A monopolistically competitive firm has the following cost structure: OUTPUT 1 2 3 4 5 6 7
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Question:
A monopolistically competitive firm has the following cost structure:
OUTPUT 1 2 3 4 5 6 7
TOTAL COST 30 32 36 40 50 63 77
The firm faces the following demand curve:
PRICE $ 20 18 15 12 9 7 4
QUANTITY 1 2 3 4 5 6 7
____25.Refer to Scenario 16-3. If the government forces this firm to produce at its efficient scale, how many units will it produce and for what profit or loss?
a.
produce 3 units and make $9
b.
produce 4 units and make $6
c.
produce 5 units and lose $5
d.
produce 6 units and lose $29
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