QUESTION: Assume that a profit maximizing plumbing company operating in a monopolistically competitive market is currently in long run equilibrium.

a) Draw a correctly labeled graph that shows the profit-maximizing firm's price and output.

HERE IS FEEDBACK FROM TEACHER:

7/10 a) graph and label: ATC curve, price P= ATC, quantity Qmc) (-3 pts.)

The ATC should be above and tangent to the D=AR. Qmc should dot up through MR=MC to the D=AR and then over to P = ATC. The ATC curve should hit MC at minATC.