Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand Given the profit-maximizing choice of output and price, Citrus Scooters is earning curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. sellers in the industry relative to the long-run equilibriu Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. PRICE (Dollars per scooter) 500 450 400 360 300 250 150 100 50 MC 0 0 50 100 ATC MR Demand 150 200 250 300 350 400 450 500 QUANTITY (Scooters) + Monopolistically Competitive Outcome Given the profit-maximizing choice of output and price, Citrus Scooters is earning Profit or Loss sellers in the industry relative to the long-run equilibrium amount. Now consider the long run in which scooter manufacturers are free to enter and exit the market. profit, which means there are negative Now consider the long run in which scooter manufacturers are free to enter and ex positive et. QQ Show the nnccihle effect of this free entry and evit hy shifting the demand curve for Individual producer of sennter Given the profit-maximizing choice of output and price, Citrus Scooters is earning Screen Shot 2023-02-26 at 1.08.58 PM fewer zero more an equal number of run in which scooter manufacturers are free to enter and exit the market. ✓sellers in the industry relative to the long-run equilibrium amount. profit, which means there Q Search profit, which means there ct of this free entry and exit by shifting the demand curve for a typical individual producer of scooters

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 1.2P

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please correct/fix my answers and complete the problem. thank you! Please also put the answers for the graph.

Show the possible effect of this free entry and exit by shifting the demand curve for a typical individual producer of scooters on the following graph.
PRICE (Dollars per scooter)
QUANTITY (Scooters)
Demand
Firms earn zero profit in the long run.
Price equals average total cost in the long run.
Firms are not price takers.
Price is above marginal cost.
Demand
Which of the following statements are true for both monopolistically competitive markets and monopoly markets? Check all that apply.
?

3. How short-run profit or losses induce entry or exit
Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand Given the profit-maximizing choice of output and price, Citrus Scooters is earning
curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus.
▼ sellers in the industry relative to the long-run equilibriu
Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive
company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss.
(?)
PRICE (Dollars per scooter)
500
450
400
350
300
250
200
150
100
50 -MC
0
0
+
50 100
ATC
MR
Demand
150 200 250 300 350 400 450
QUANTITY (Scooters)
500
++
Monopolistically Competitive Outcome
Given the profit-maximizing choice of output and price, Citrus Scooters is earning
Profit or Loss
sellers in the industry relative to the long-run equilibrium amount.
Now consider the long run in which scooter manufacturers are free to enter and exit the market.
profit, which means there are
negative
Now consider the long run in which scooter manufacturers are free to enter and ex positive et.
zero
Show the possible effect of this free entry and exit hy shifting the demand curve for a rular individual producer of scooters or
Q
an equal number of
Given the profit-maximizing choice of output and price, Citrus Scooters is earning
fewer
✩
more
Screen Shot 2023-02-26 at 1.08.58 PM
@
sellers in the industry relative to the long-run equilibrium amount.
profit, which means there ar
run in which scooter manufacturers are free to enter and exit the market.
Q Search
profit, which means there are
P
ct of this free entry and exit by shifting the demand curve for a typical individual producer of scooters on t

Expert Solution

Step 1: Monopolistic competition.

Monopolistic competition refers to the market where there are a large number of buyers and sellers that sell differentiated products that are not perfect substitutes for each other. The firms in the market have some pricing power. The market has some degree of barrier to entry and exit.

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