Monopolistic Competition Consider the fotlowing graph, (graph 1) for the short run equilibrium for a monopolisticatly competitive firm producing printers for commercial operations. Graph1 $ Price per unit P1 ATC MC P2 Pa D3 D2 Q2 Q1 Q3 Quantity MR2 MR. The following information is given: D1 = $35,000- $15Q TC = $550,000 + $1,000Q+ $10Q? Answer the following and referring to the relevant elements of graph 1 above and show all workings, (a) Calculate price output and profit for the short run equilibrium (show all workings). (b) Calculate price, outputand profit for the long run equilibrium (with and without product differentiation) (show all workings). (c) Is the market allocatively efficient in the short run or long run (why or why not?). (d) Is the market productively efficient in the short run or long run (why or why not?).

Monopolistic Competition Consider the fotlowing graph, (graph 1) for the short run equilibrium for a monopolisticatly competitive firm producing printers for commercial operations. Graph1 $ Price per unit P1 ATC MC P2 Pa D3 D2 Q2 Q1 Q3 Quantity MR2 MR. The following information is given: D1 = $35,000- $15Q TC = $550,000 + $1,000Q+ $10Q? Answer the following and referring to the relevant elements of graph 1 above and show all workings, (a) Calculate price output and profit for the short run equilibrium (show all workings). (b) Calculate price, outputand profit for the long run equilibrium (with and without product differentiation) (show all workings). (c) Is the market allocatively efficient in the short run or long run (why or why not?). (d) Is the market productively efficient in the short run or long run (why or why not?).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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