1. A firm under the monopolistic competition market structure faces ____________

Question

1. A firm under the monopolistic competition market structure faces ____________ demand curve and ___________ marginal revenue curve.

2.Note the special directions for this question.

Consider an industry with six total firms. Information for these firms is given below (though some information is missing):

The four-firm concentration ratio is 84% for this industry. Firms BB and DD are the smallest firms in terms of output produced.

Carefully follow numeric instructions to calculate the percentage of output produced by Firm EE.  

Enter your answer as a percent but without the percentage sign (for example - if you want to answer 99 percent (0.99 in decimal form) enter only 99.) Round your answer to the nearest whole number.

With Q2 please clarify answer since im unsure of my calculations already, Thank you!

Explanation / Answer

1. A monopolistic competition faces downward sloping demand curve as well as downward sloping marginal revenue curve.

2. Four-firm concentration ratio is the fraction of industry's output accounted by the four largest firms.

Since BB and DD are the smallest firms. So four-firm concentartion is AA+CC+EE+FF = 84

Substituting the values from above we get,

EE = 34

And output produced by BB = 100-(13+21+10+34+16 )

BB = 100- 94 = 6

So output produced by BB is 6% and EE is 34%.

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