MindTap - Cengage L - C ng.cengage.com/staticb/ui/evo/index.html?deploymentld=5... @1 Discover (4) Read Manga Online M Read Manga Onlin... ~ Leveling Up, By O... ComicK - Fast... Homework: Monopolistic Competition, Oligopoly, and Game Theory (Ch 11) Back to Assignment Attempts Keep the Highest / 3 3. Is monopolistic competition efficient? Suppose that a firm produces polo shirts 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. ? 100 90 80 Mon Comp Outcome Min Unit Cost PRICE (Dollars per shirt) ATC MC MR o Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of shirts) Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that P = ATC at the optimal quantity. Furthermore, the quantity the firm produces in long-run equilibrium is_ equal to the quantity at which firms minimize average total cost. True or False: This indicates that there is no excess capacity in the market for shirts. O True False Grade It Now Save & Continue Continue without saving