Econ Week 9

Running head : monopolistic competitionMonopolistic competitionNameCourseTutorDateOUTLINE1 .Introduction2 .BodyMonopolistic foodstuffAntitrust laws3 .ConclusionReferenceMonopolistic grocerya . The market that the degenerate is in operation(p) in is a monopolistically competitive market . This is because we are habituated the assumptions that there are some other firms in the very(prenominal) market and that there are no barriers to entry that defend other firms out of the market . These small firms also wander tell apart goodsb . 1 . The firm could choose 7000 units of bread piprs .This is where marginal cost is equals to marginal revenue ( MC MR ) and profits cosmetic surgery only be maximized at this point2 . The firm would there for eruption 95 as this is where the 7000 units of breadmakers would be demanded (Harris , 2001c . The firm will make a bolshy of about 245000 .

This is because the ATC of 7000 units is about 130 consequence that the firm is loosing 35 per every unit produced .7000 units times 35 gives 245000d . The rectangle above shows the going the firm is making which is equals to the total repair cost ( outlet TFC ) and therefore the firm should shutdown at point expense equals to average variable cost (P AVC (Harris , 2001e . In the long unscramble the firm will overstep the market due to losings that may continue making . assuming it does not exit , the demand increases . This will cause it to raise prices .This on ly happens when the firm breaks evenf...If y! ou want to get a unspoiled essay, order it on our website: OrderCustomPaper.com

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