37. Figure 10.3 shows the demand, marginal revenue, and cost curves for a monopo

Question

37. Figure 10.3 shows the demand, marginal revenue, and cost curves for a monopolistic competitor. In th * Figure 10.3. MC Price ATC GMN III MR 10 15 Quantity a. new technology will lower average total costs and increase profits for the firm b. firms will exit this market, causing economic profit to increase c. product differentiation will lead to an increase in profits earned by the firm d. new firms will enter the market, driving economic profit to zero e. firms will produce 15 units of output

Explanation / Answer

Ans is A

Since monopolistoc always produce where MR=MC and inprovement in technology will lower ATC and will ikcrease the profit which in turn will attravf new firms because firm will be earning economic profit.

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.