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These three questions please Question 37 (1 point) Table 16-1 A monopolistically competitive firm faces the...   Question 37 (1 point) Table 16-1 A monopolistically competitive firm faces the following demand curve for its product: Price (S) 10 4 8 7 6 16 8 10 5 12 4 14 3 16 2 18 20 1 Refer to Table 16-1. The firm has total fixed costs of \$20 and a constant marginal cost of \$5 per unit. What will the firm do? It will produce 2 units; firms will exit the market in the long run. It will produce 4 units; firms will exit the market in the long run. It will produce 6 units; firms will exit the market in the long run. It will produce 8 units; firms will exit the market in the long run.
Question 39 (1 point) In the long run, a profit-maximizing firm in a monopolistically competitive market operates at which of the following? U a level of output at which marginal revenue is rising O a level of output at which marginal cost is falling O a level of output at which average total cost is falling a level of output at which average total cost is rising
Question 47 (1 point) Once a cartel is formed, what structure in effect serves the market? a monopoly an oligopoly imperfect competition monopolistic competition

37. Profit maximizing condition under monopolistic competition is where MR=MC.

 P Q TR=P(Q) MR=(change in TR/Change in Q) 10 2 20 - 9 4 36 8 8 6 48 6 7 8 56 4 6 10 60 2 5 12 60 0 4 14 56 -2 3 16 48 -4 2 18 36 -6 1 20 20 -8

MC = \$5 per unit

We can see from the table above, that when Q=6 units ,MR>MC and when Q=8 units ,MR<MC. So, the firm will produce 6 units. At this output level , TR= \$48 and TC = FC+MC(Q) = 20+5(8) = \$60. Because firms are incurring loss , so the firms will exit the market in the long run. Hence,option(C) is correct.

39. In the long run a profit maximizing firm in a monopolistically competitive market operates at a level at which average total cost is falling. Hence,option(C) is correct.

47. Once a cartel is formed,a monopoly structure in effect serves the market. Hence, option(A) is correct.

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