A monopolistically competitive firm faces the following demand curve for its product: $$\begin{array} { | l | c | c | c | c | c | c | c | c | c | c | }
\hline \text { Price (dinar) } & 10 & 9 & 8 & 7 & 6 & 5 & 4 & 3 & 2 & 1 \
\hline \text { Quantity } & 2 & 4 & 6 & 8 & 10 & 12 & 14 & 16 & 18 & 20 \
\hline
\end{array}$$ The firm has total fixed costs of 40 dinars and a constant marginal cost of 2 dinars per unit.We can conclude that

Question

A monopolistically competitive firm faces the following demand curve for its product: $$\begin{array} { | l | c | c | c | c | c | c | c | c | c | c | } 
\hline \text { Price (dinar) } & 10 & 9 & 8 & 7 & 6 & 5 & 4 & 3 & 2 & 1 \
\hline \text { Quantity } & 2 & 4 & 6 & 8 & 10 & 12 & 14 & 16 & 18 & 20 \
\hline
\end{array}$$ The firm has total fixed costs of 40 dinars and a constant marginal cost of 2 dinars per unit.We can conclude that

Quizplus · Accepted Answer

In long-run equilibrium, firms will enter or exit the market until the price equals the minimum of average total cost. In this case, the minimum of average total cost is 4 dinars, which is equal to the price. Therefore, this market is in long-run equilibrium.

A Monopolistically Competitive Firm Faces the Following Demand Curve for Its