1. Draw and label a graph depicting a monopolistic market from perspective of a single firm. Make sure you illustrate the profit maximizing price and quantity (10 points total).
a. Start with a graph depicting market equilibrium for the monopolistic market (5 points possible).
b. Modify the graph to demonstrate that the price at the profit maximizing level of output is below the average variable cost curve (5 points possible).
c. a. Is the firm making a profit or loss? Show this area on the graph in part 1 (10 points possible).
d. b. Will the firm decide to continue to produce in the short-run (or will it shutdown) (5 points possible)?
e. c. Will the firm decide to continue to produce in the long-run (or will it leave the market) (5 points possible)?
.awasam-promo3 {
background-color: #F5F9FF;
color: #000000;
text-align: center;
padding: 20px;
border-radius: 10px;
}
.button {
background-color: #4CAF50;
border: none;
color: white;
padding: 10px 20px;
text-align: center;
text-decoration: none;
display: inline-block;
font-size: 16px;
margin: 4px 2px;
cursor: pointer;
border-radius: 5px;
}
.button-whatsapp {
background-color: #41D07D;
border: none;
color: white;
padding: 10px 20px;
text-align: center;
text-decoration: none;
display: inline-block;
font-size: 16px;
margin: 4px 2px;
cursor: pointer;
border-radius: 5px;
}
.awasam-alert {
color: red;
}
Needs help with similar assignment?
We are available 24×7 to deliver the best services and assignment ready within 6-8 hours? Order a custom-written, plagiarism-free paper
Get Answer Over WhatsApp
Order Paper Now