A monopolistically competitive firm has the following demand and cost structure in the short-run. Output Price FC
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Question:
A monopolistically competitive firm has the following demand and cost structure in the short-run.
Output Price FC VC TC TR Profit/Loss
0 $90 $30 $0 ____ ____ ________
1 80 ____ 40 ____ ____ ________
2 70 ____ 80 ____ ____ ________
3 60 ____ 140 ____ ____ ________
4 50 ____ 220 ____ ____ ________
5 40 ____ 320 ____ ____ ________
6 30 ____ 440 ____ ____ ________
7 20 ____ 580 ____ ____ ________
What level of output maximizes profit or minimizes loss?
Should this firm operate or shut down in the short-run? Why?
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