Author Question: The diagram below shows selected cost and revenue curves for a firm in a monopolistically ... (Read 24 times)

gjjjjjdkkkkk3k3k33k · **on:** Oct 12, 2022

The diagram below shows selected cost and revenue curves for a firm in a monopolistically competitive industry.

FIGURE 11-1

Refer to Figure 11-1. If this firm is maximizing its profits, does the diagram depict a long-run equilibrium situation?

◦ Yes, because this firm is producing where MC = MR and is earning economic profits.
◦ Yes, because this firm is producing where MC = MR and is earning zero profits.
◦ No, because this firm is a natural monopoly.
◦ No, because this firm is suffering losses and firms will exit this market.
◦ No, because this firm is earning profits which will attract new firms to this market.

ellie · **Reply #1 on:** Oct 12, 2022

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