Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help our assignment for microecon with explanation. Ad-A: Mutande Capitano (Capitan Underpants] is a monopolistically competitive firm who occupies a small niche segment in

Please help our assignment for microecon with explanation.

image text in transcribedimage text in transcribed
Ad-A: Mutande Capitano (Capitan Underpants] is a monopolistically competitive firm who occupies a small niche segment in the breakfast cereal industry. The demand curve facing the rm is depicted in Columns C1 and C2 ofthe table below, while the firm's total revenue and marginal revenue curves are partially computed in Columns (3 and C4. The firm's cost curves, including MC, FC, VC, TC and ATC are in Columns C5 to C9, respectively. Table 1 Originelm Denund Revenue and Cost Curves of Mutende Cepiteno: A Monopolistlcell; Competitive Firm {1} i2} {3} i4} i5} i6} 0 1 2 3 4 5 6 7 8 9 H Cl Fill In all the blank entries in Table 1. (Hint: VCzum = V121,...\" + MGM ml What is the profit-maximizing output quantity, (1'? Answer: (1' I units What is the rm's profit-maximizing output price? Answer: 5 At (1", what is the firm's ATC? Answer: 5 What is the firm's profit per unit of output? Answer: 5 Given {5), which of the following is TRUE in the long run? Answer: (A) Entry will happen, stealing consumers away from the existing rm and, thus, shifting the demand curve the firm faces to the left. The firm will charge a lower price. {Bi Exit will happen, bringing additional consumers to the remaining firms and, thus, shifting the demand curve the firm faces to the right. The firm will raise its price. {C} Neither entry nor exit will happen and, thus, the demand curve facing the firm will stay constant. Ali-B: Continue the monopolistic competition problems in QdA. Over time, the demand curve facing the rm shifted from leC2 in Table 1 (previous page] to C111C12 in Table 2 below. Table 2 Revenue and Cost Curves of Mutende Copitano: A Monopollistieelly Competitive Firm {1} {2} l3} {4} l5} l6} l7} l3} 88888888 0 1 2 3 4 5 6 7 B 9 n.- 0 Comparing C11/C12 in Table 2 with CHCZ in Table 1 [on the previous page], what happened to the demand curve facing the firm? (A) It has shifted in/shifted down/decreased. {B} It has shifted outlshifted up/increased. Answer: Given the new demand curve in C11/C12, ll in the blanks in Columns C13 and C14 by computing the n'n's new total revenue and marginal revenue curves. Since there is no change in the rrn's cost structure, C15\"C19 should be the same as C5"C9. To facilitate the subsequent analysis, ll in the blanks in C16"C19. What is the prot-maximizing output quantity, 0'"? Answer: Q" = _ unlts What is the firm's profit-maximizing output price? Answer: 5 At (1* *, what is the firm's ATC? Answer: 5 What is the rm's profit per unit of output? Answer: 5 Is the rm in long-run equilibrium

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Elementary Statistics

Authors: Robert R. Johnson, Patricia J. Kuby

11th Edition

978-053873350, 9781133169321, 538733500, 1133169325, 978-0538733502

Students also viewed these Economics questions

Question

1. Give them prompts, cues, and time to answer.

Answered: 1 week ago