ECON 625 A monopolistically competitive firm has the following short-run

| June 13, 2018

Questions 7-10 are based on the following scenario: A monopolistically competitive firm has the following short-run inverse demand, marginal revenue, and cost schedules for a particular product:P = $45 – $0.2QMR = $45 – $0.4QTC = $500 + $5QMC = $57.) What quantity would maximize profits for this firm? (Hint: Recall that profit maximizing is where MR = MC)8.) At what price should this firm sell its product?9.) What would be the amount of the firm’s total revenue at the quantity and price identified in the prior two questions?10.) What would be the amount of the firm’s profit (positive number) or loss (negative number) at the quantity and price identified in questions 6 and 7?

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