Eco Energy is a monopolistically competitive producer of a sports beverage calle
ID: 1161600 • Letter: E
Question
Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. The table to the right shows the firm's demand and cost schedules Quantity Price Total Revenue Total Cost Cases) (Dollars)Dollars)(Dollars) $75 140 195 240 275 300 315 320 315 $60 85 105 115 130 155 190 230 280 S75 70 65 60 What is likely to happen to the product's price in the long run? O A. It will increase. O B. It will remain constant O C. It will fall OD. Cannot be determined without information on its long run cemand 50 45 40 35 curve to select your answerExplanation / Answer
Option C
Because of good profits, new firms would enter which would force the firm to reduce the price. Now it operates at P = 55 where profit is maximum
Q
P
TR
TC
Profit
MC
MR
1
75
75
60
15
2
70
140
85
55
25
65
3
65
195
105
90
20
55
4
60
240
115
125
10
45
5
55
275
130
145
15
35
6
50
300
155
145
25
25
7
45
315
190
125
35
15
8
40
320
230
90
40
5
9
35
315
280
35
50
-5
Q
P
TR
TC
Profit
MC
MR
1
75
75
60
15
2
70
140
85
55
25
65
3
65
195
105
90
20
55
4
60
240
115
125
10
45
5
55
275
130
145
15
35
6
50
300
155
145
25
25
7
45
315
190
125
35
15
8
40
320
230
90
40
5
9
35
315
280
35
50
-5
Related Questions
Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.