Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastiqu curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically c company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. (? 500 450 Monopolistically Competitive Outcome 400 350 300 Profit or Loss 250 ATC 200 150 100 50 MO MR Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes) negative, positive, zero Given the profit-maximizing choice of output and price, the shop is earning profit, which means there are fewer, more, no shops in the industry than in long-run equilibrium. more no fewer Now consider the long run in which bike manufacturers are free to enter and exit the market. PRICE (Dollars per bike)
Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastiqu curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically c company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. (? 500 450 Monopolistically Competitive Outcome 400 350 300 Profit or Loss 250 ATC 200 150 100 50 MO MR Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes) negative, positive, zero Given the profit-maximizing choice of output and price, the shop is earning profit, which means there are fewer, more, no shops in the industry than in long-run equilibrium. more no fewer Now consider the long run in which bike manufacturers are free to enter and exit the market. PRICE (Dollars per bike)
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 11PAE
Related questions
Question
100%
please also do the grph. thank uuu
Transcribed Image Text:Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand
curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve.
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.
(?
500
450
Monopolistically Competitive Outcome
400
350
300
Profit or Loss
250
ATC
200
150
100
50 MO
MR
Demand
50
100
150
200
250
300
350
400
450
500
QUANTITY (Bikes)
negative, positive, zero
Given the profit-maximizing choice of output and price, the shop is earning
profit, which means there are
fewer, more, no
shops in the industry than in long-run equilibrium.
more no fewer
Now consider the long run in which bike manufacturers are free to enter and exit the market.
Show the possible effect of free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph.
PRICE (Dollars per bike)
Transcribed Image Text:Given the profit-maximizing choice of output and price, the shop is earning
profit, which means there are
shops in the industry than in long-run equilibrium.
Now consider the long run in which bike manufacturers are free to enter and exit the market.
Show the possible effect of free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph.
(?)
Demand
Demand
QUANTITY (Bikes)
Which of the following statements are true about both monopolistic competition and monopoly? Check all that apply.
Firms can earn positive profit in the long run.
Firms earn zero profit in the long run.
Price is above marginal cost.
O Firms are not price takers.
PRICE (Dollars perbike)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning