Microeconomics

Question 3 [14 points] The following graphs are for the firm Frank's Robots in an industry that is monopolistically competitive. a) Plot the equilibrium point in the graph below. Equilibrium 90 ATC -MR 75 D 60 Price, Cost ($/Q) 4 45 MC 30 15 2 5 6 Reset Units of Output b) Mark the area for total economic profit in the graph above. c) In the following graph, drag the demand line (D) so that it is consistent with zero economic profits.Question 3 [14 points] The following graphs are for the firm Frank's Robots in an industry that is monopolistically competitive. a) Plot the equilibrium point in the graph below. - Equilibrium Equilibrium Economic Profit (Shaded Region) 90- AL MR 75 D 60- Price, Cost ($/Q) 45 MC 30- 15 0 2 3 5 6 Reset Units of Output b) Mark the area for total economic profit in the graph above. c) In the following graph, drag the demand line (D) so that it is consistent with zero economic profitsb) Mark the area for total economic profit in the graph above. c) In the following graph, drag the demand line (D) so that it is consistent with zero economic profits. Demand 90 ATC 75- 60-D Price, Cost ($/Q) 45- MC 30+ MR 15 3 Reset 5 6 Units of Output d) Drag the marginal revenue line (MR) so that it is also consistent with zero economic profits. e) Plot the new equilibrium point.b) Mark the area for total economic profit in the graph above. c) In the following graph, drag the demand line (D) so that it is consistent with zero economic profits. Demand Demand Marginal Revenue Equilibrium 75 60-D Price, Cost ($/Q) 45+ MC 30- MR 15. 3 4 5 6 Reset Units of Output d) Drag the marginal revenue line (MR) so that it is also consistent with zero economic profits. e) Plot the new equilibrium point