XYZ Corporation is a monopolistic competitor. It has fixed costs of $1,000 per month and a constant marginal cost of $1 per unit of production.

I.Will it earn a monopoly profit if it produces 1,000 units and sells each for $1.50?II.Suppose the demand curve facing XYZ Corporation shifts to the right, so it now can sell 2,000 units at $1.50 each. Will it now earn a monopoly profit?III.Why might XYZ's demand curve shift to the right?IV.What must XYZ do to find its short-run equilibrium price and quantity?