You are the manager of a monopolistically competitive firm, and your demand and cost functions are estimated asQ = 36 2P and C(Q) = 6+ 3Q + Q².

a. Find the inverse demand function for your firm's product.

P =(???) (???) Q

b. Determine the profit-maximizing price and level of production.

Instructions: Round your response to the nearest penny (two decimal places).

Price: $ ???

Instructions: Round your response to one decimal place.

Quantity: ???

c. Calculate your firm's maximum profits.

Instructions: Round your response to the nearest penny (two decimal places).

$ ???

d. What long-run adjustments should you expect? Explain.

multiple choice

• Exit will occur until profits rise sufficiently high.
• Entry will occur until profits are zero.
• Neither entry nor exit will occur.