I asked a previous question, first was the correct answers and explanations for the answers as I received 0.8 out of 4 points. Below the previous question is the current question I need help answering. Please let me know if I need to explain it differently.

2. Entry or exit in the long run Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). 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. Correct Answer Your Answer 500 450 Monopolistically Competitive Outcome 400 350 AX ATC 300 Profit or Loss PRICE (Dollars per bike) 250 200 150 100 MC MR Demand 0 50 100 150 200 250 300 350 400 0 450 500 QUANTITY (Bikes) Points: 0 /1Explanation: Close Explanation A firm in a monopolistically competitive market chooses its short-run production quantity by setting marginal revenue equal to marginal cost, which occurs at 175 bikes in this case. The firm will then charge the price on the demand curve that corresponds to a quantity of 175 bikes, which is the maximum price that it can charge ($275 per bike). Profit is equal to total revenue minus total cost: Profit = Total Revenue - Total Cost = Price x Quantity - Average Total Cost x Quantity = (Price - Average Total Cost) x Quantity Therefore, the correct answer on the graph shows profit as the area between $275 and $375, up to 175 bikes. Because the average total cost ($375 per bike) is higher than the price ($275 per bike) at the profit-maximizing quantity, Fantastique Bikes is suffering an economic loss. Given the profit-maximizing choice of output and price, the shop is earning positive X profit, which means there are fewer X shops in the industry than in long-run equilibrium. Points: 0 / 1 Explanation: Close Explanation A In the short run, if firms in a monopolistically competitive market earn negative profit, there are more firms in the market than there would be in long-run equilibrium. As competitors exit the market, the demand for bikes from any given bike shop will increase, so that each bike shop sells more bikes at any given price. Because market entry is easy, the typical monopolistically competitive firm earns zero profit in the long run. Now consider the long run in which bike manufacturers are free to enter and exit the market.Show the possible effect of free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. Correct Answer Your Answer O Demand PRICE (Dollars per bike) QUANTITY (Bikes) Points: 0/ 1 Explanation: Close Explanation The exit of some producers from a monopolistically competitive market causes a rightward shift of the demand curve facing the typical producer. That is, when a typical bike manufacturer is suffering an economic loss in the short run, some firms will exit the market in the long run, so that the demand faced by each firm remaining in the market shifts to the right.Explanation: Close Explanation The exit of some producers from a monopolistically competitive market causes a rightward shift of the demand curve facing the typical producer. That is, when a typical bike manufacturer is suffering an economic loss in the short run, some firms will exit the market in the long run, so that the demand faced by each firm remaining in the market shifts to the right. Which of the following statements are true about both monopolistic competition and monopoly? Check all that apply. V Firms are not price takers. V O Firms can earn positive profit in the long run. V O Firms earn zero profit in the long run. x _ Price equals average total cost in the long run. Points: 0.75 / 1 Explanation: Close Explanation A monopolistically competitive market is characterized by (1) many sellers, (2) product differentiation, and (3) easy entry and exit. Under monopolistic competition, many firms compete for the same set of customers. Each firm produces a product that is at least somewhat differentiated from those of other firms, while entry in the market is easy. Because of these characteristics, monopolistically competitive firms resemble monopolists in that they are not price takers. Rather, they face downward-sloping demand curves for their product; thus, the profit-maximizing price is always above marginal cost (P > MC), which implies that monopolistically competitive firms allocate resources inefficiently. However, profit for monopolistic competitors, unlike for monopolies, is driven to zero in the long run, as demand for each firm's product adjusts with the entry and exit of other firms until price equals average total cost.2. Entry or exit in the long run Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). 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 blistically Competitive Outcome 400 350 Profit or Loss 300 250 PRICE (Dollars per bike) ATC 200 150 100 50 MC MR Demand 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes)lGiiiien the prot-maximizing choice of output and price, the shop is earning v prot, which means there are 7 shops in the if'ldUEtW than in longrun equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. O Demand PRICE (Dollars per bike) Demand QUANTITY (Bikes) Which of the following statements are true about both monopolistic competition and monopoly? Check all that apply. O Firms can earn positive profit in the long run. O Firms earn zero profit in the long run. O Price is above marginal cost. O Price equals average total cost in the long run