Please help

Unit 09 - Monopolistic Competition and Oligopoly Homework Instructions: This homework will provide you with an opportunity to apply the ideas and concepts from the chapter readings, lecture notes, and videos. You should (1) write out the answers to each question either in the space provided in this document, or on separate paper, then for class credit, (2) submit your answers using the appropriate unit homework quiz on D2L/Brightspace. Question 01: Consider the $200 cost and revenue curves to 175 the right for a firm in a monopolistically MC 150 competitive industry - let's Profit say a shoe store ("Shoes R Pm = $122 per unit 125 Us") in the local Chicago Economic market. "Shoe R Us" is 100 profit ATC Price, costs, and revenue noted for its good location, quality shoes, and expert 75 A - $94 staff of salespeople. 50 MR = MC 25 Qm # 5 units MR 8 10 Q Quantity a) Just like a monopoly, a "monopolistically competitive" company has a downward sloping demand curve with a MR curve below it. This is because "Shoes R Us" has some control over price due to the fact its product/service is [ identical to all its competitors OR differentiated in some way ]. b) [ True or False ] Similar to the monopoly structure, the Marginal Revenue (MR) curve is below the demand curve. This is because as Shoes R Us lowers its price to increase quantity demanded, it must lower it for all customers, not just for new customers. c) If the price is $150, Shoes R Us can sell 2 pairs of shoes (per day, let's say). If Shoes R Us lowers its price to $75, it can sell how many per day? d) The MR = MC rule still holds just like for competitive firms. What is the maximizing quantity of output where the MR and MC intersect? e) In the short run, this shoe store seems to be making an "economic profit" - the shaded area - calculate this profit: (Price - ATC) * Quantity. Note: PM is the price and A is the ATC in the figure. f) In a perfectly competitive market, entry and exit into the market is easy for companies. In a "monopolistically competitive" market entry and exit into the market is still relatively [ easy OR "n hard ]. Therefore, in the long run, a monopolistically competitive company only enjoys a " profit, no "economic profits" are possible because of potential competitors