Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. 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. ? 1 PRICE (Dollars per scooter) 500 450 400 PRICE (Dollars per scooter) 350 300 250 200 150 100 50 4 0 MC 0 50 100 Demand 200 250 300 350 400 450 500 QUANTITY (Scooters) 150 MR ATC + Given the profit-maximizing choice of output and price, Citrus Scooters is earning 2 are 3 Now consider the long run in which scooter manufacturers are free to enter and exit the market. + Monopolistically Competitive Outcome ▾sellers in the industry relative to the long-run equilibrium amount. 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 QUANTITY (Scooters) Demand Profit or Loss Demand (? profit, which means there Which of the following statements are true for both monopolistically competitive markets and monopoly markets? Check all that apply. 5 Firms can earn positive profit in the long run. Price is above marginal cost. Firms are not price takers. Price equals average total cost in the long run.
Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. 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. ? 1 PRICE (Dollars per scooter) 500 450 400 PRICE (Dollars per scooter) 350 300 250 200 150 100 50 4 0 MC 0 50 100 Demand 200 250 300 350 400 450 500 QUANTITY (Scooters) 150 MR ATC + Given the profit-maximizing choice of output and price, Citrus Scooters is earning 2 are 3 Now consider the long run in which scooter manufacturers are free to enter and exit the market. + Monopolistically Competitive Outcome ▾sellers in the industry relative to the long-run equilibrium amount. 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 QUANTITY (Scooters) Demand Profit or Loss Demand (? profit, which means there Which of the following statements are true for both monopolistically competitive markets and monopoly markets? Check all that apply. 5 Firms can earn positive profit in the long run. Price is above marginal cost. Firms are not price takers. Price equals average total cost in the long run.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 11PAE
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Transcribed Image Text:Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand
curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus.
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.
1
are
500
ATC
300
250
X
200
MC
MR
PRICE (Dollars per scooter)
PRICE (Dollars per scooter)
450
400
350
150
100
50
0
0
200 250 300 350 400 450 500
QUANTITY (Scooters)
Given the profit-maximizing choice of output and price, Citrus Scooters is earning 2
3
Now consider the long run in which scooter manufacturers are free to enter and exit the market.
50 100
150
Demand
QUANTITY (Scooters)
sellers in the industry relative to the long-run equilibrium amount.
Monopolistically Competitive Outcome
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
4
Demand
Profit or Loss
Demand
5
profit, which means there
Which of the following statements are true for both monopolistically competitive markets and monopoly markets? Check all that apply.
O Firms can earn positive profit in the long run.
Price is above marginal cost.
Firms are not price takers.
Price equals average total cost in the long run.
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