A firm operating in a monopolistically competitive market faces demand and marginal revenue curves as given below:
P = 10 - 0.1Q MR = 10 - 0.2Q
The firm's total and marginal cost curves are:
TC = - 10Q + 0.0333Q³ + 130 MC = -10 + 0.0999Q²,
where P is in dollars per unit, output rate Q is in units per time period, and total cost C is in dollars.
a. Determine the price and output rate that will allow the firm to maximize profit or minimize losses.
b. Compute a Lerner index.

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The Answer of A firm operating in a monopolistically competitive market faces demand and marginal revenue curves as given below: P = 10 - 0.1Q MR = 10 - 0.2Q The firm's total and marginal cost curves are: TC = - 10Q + 0.0333Q³ + 130 MC = -10 + 0.0999Q², where P is in dollars per unit, output rate Q is in units per time period, and total cost C is in dollars. a. Determine the price and output rate that will allow the firm to maximize profit or minimize losses. b. Compute a Lerner index.

A Firm Operating in a Monopolistically Competitive Market Faces Demand