Monopolistic output choice

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Reference no: EM1316630

1. Suppose a monopolistic competitor in long-run equilibrium has a constant marginal cost of $6 and faces the demand curve given in the following table:

Q

P

MC

20

2

6

18

4

6

16

6

6

14

8

6

12

10

6

10

12

6

8

14

6

6

16

6

a. What output will the firm choose?
b. What will be the monopolistic competitor's average fixed cost at the output it chooses?

2. The pizza market is divided as follows: Pizza hut20.7%, Domino's 17.0, Little Caesar's6.7, Pizza Inn2.2 Round Table2.0, all others51.4,

a. How would you describe its market structure?
b. What is the approximate Herfindahl index?
c. What is the four-firm concentration ratio?

Reference no: EM1316630

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