Homework (Ch 16) Suppose that a firm produces wooden train engines in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. 109 Mon Comp Outcome Mn Uni Cost PRICE (Dollar per engine ATO Demand QUANTITY (Thousands of engines) Because this market is a monopolistically competitive market, you can tell that it is in long run equilibrium by the fact that Pe AJC . at the optimal quantity for each firm. Furthermore, a monopolistically competitive firm's average total cost in long-run equilibrium is less than . the minimum average total cost. True or False: This indicates that there is a markup on marginal cost in the market for engines. True OFalie Monopolise competition may also be sodally Inefficient because there are too many or too few firms in the market. The presence of the " eilerminty implies that there is too little entry of new firms in the market