You are hired as a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost: P=MC, P>ATCP=MC, P>ATC Which of the following statements are true about the firm? Check all that apply. The firm can increase its profit by reducing its output. The firm is possibly maximizing profit. The firm is in long-run equilibrium.

You are hired as a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost: P=MC, P>ATCP=MC, P>ATC Which of the following statements are true about the firm? Check all that apply. The firm can increase its profit by reducing its output. The firm is possibly maximizing profit. The firm is in long-run equilibrium.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 3SQ

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You are hired as a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maximizing profit? If not, what should it do to increase profit? If the firm is maximizing profit, is the market in a long-run equilibrium? If not, what will happen to restore long-run equilibrium? P < MC, P > ATC P > MC, P < ATC P = MC, P > ATC P > MC, P = ATC
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