Short-run inverse demand and cost schedules

Assignment Help Business Economics

Reference no: EM131004896

(Monopolistic Competition)

A monopolistically competitive firm has the following short-run inverse demand and cost schedules for a particular product:

P = 45 – 0.2Q

TC = 500 + 5Q

a. Following the MR = MC rule, at what price should this firm sell its product? At this price is the firm having positive or negative economic profits? What does the profit ( or loss) equal?

b. What would happen to the firm’s demand and profit (or loss) as the firm moves toward the long run?

c. Suppose in the long run, the firm’s inverse demand shifts to P = 25 – 0.2Q. What price should the firm charge? What does the profit (or loss) equal?

d. Provide graphs for both the short run and long run scenarios. Make sure your graphs include demand curve, MR, MC, and AC curves.

Please accurate to explain please

Reference no: EM131004896

Questions Cloud

Oregon has an income tax but no state sales tax : Oregon has an income tax but no state sales tax, while Washington has no state income tax but does have a state sales tax. Oregon residents can deduct the state taxes they pay (the income tax payments) from their federal income taxes, while Washingto..

Solve the social problems of poverty : "What do you think can be done to solve the social problems of poverty?" (Yes, poverty is a problem but that does not mean we should tolerate it

Why has uber cut prices substantially : A) Why has Uber cut prices substantially? ($500) B) What assumptions has Uber made about price elasticity of demand among its customers? ($500) C) If customer demand is price inelastic, will total revenue rise or fall? Explain your answer in 1-2 sent..

What is the cross-price elasticity of demand between good : The demand curve for a product is given by Qdx= 1,200- 3Px- 0.1Pz where Pz =$300. What is the own price elasticity of femand when Px =$140? Is demand elastic or inelastic at this price? what would happen to the firms revenue if it decided to charge a..

Short-run inverse demand and cost schedules : A monopolistically competitive firm has the following short-run inverse demand and cost schedules for a particular product: What would happen to the firm’s demand and profit (or loss) as the firm moves toward the long run? Suppose in the long run, th..

Discuss the evolution of the actor : Discuss the evolution of the actor, director, and playwright. How have they been intertwined throughout history and how did they separate into distinct entities

Determinants and shifters for the demand for bonds : List the determinants/shifters for the demand for bonds and the supply of bonds. For each determinant, explain the effect on either the demand or supply and the resulting shift in either curve.

The absolute advantage in producing each good : Suppose Jilbo can make 18 flower pots or 2 coffee mugs per day. Her cousin Jimbo can make 10 flower pots or 6 coffee mugs per day. What is the opportunity cost for Jilbo of producing 1 flower pot? of 18 flower pots? What is the opportunity cost for ..

Statements best describes the underlying philosophy : Which of the following statements best describes the underlying philosophy of Deming’s work in the area of quality assurance?

User Account

All Pages