Demand and Cost Data for Sylvie's Shampoo Company Table 26.2
A Monopolistically Competitive Firm
$$\begin{array} { | r | r | r | r | }
\hline { \text { Price } } &{ \begin{array} { c }
\text { Demand Data } \
\text { Quartity }
\end{array} } & \text { Cost Data Output } & { \text { Total Cost } } \
\hline \$ 22 & 6 & 6 & \$ 96 \
\hline \$ 20 & 7 & 7 & \$ 104 \
\hline \$ 18 & 8 & 8 & \$ 114 \
\hline \$ 16 & 9& 9 & \$ 126 \
\hline \$ 14 & 10 & 10 & \$ 140 \
\hline
\end{array}$$
Refer to Table 26.2.At the profit-maximizing output and price,Sylvie's Shampoo Company.will earn a ________ economic profit,and ________ the market will occur.
A)negative;entry into
B)negative;exit from
C)positive;entry into
D)positive;exit from

Question

Demand and Cost Data for Sylvie's Shampoo Company Table 26.2
A Monopolistically Competitive Firm
$$\begin{array} { | r | r | r | r | } 
\hline { \text { Price } } &{ \begin{array} { c } 
\text { Demand Data } \
\text { Quartity }
\end{array} } & \text { Cost Data Output } & { \text { Total Cost } } \
\hline \$ 22 & 6 & 6 & \$ 96 \
\hline \$ 20 & 7 & 7 & \$ 104 \
\hline \$ 18 & 8 & 8 & \$ 114 \
\hline \$ 16 & 9& 9 & \$ 126 \
\hline \$ 14 & 10 & 10 & \$ 140 \
\hline
\end{array}$$
 Refer to Table 26.2.At the profit-maximizing output and price,Sylvie's Shampoo Company.will earn a ________ economic profit,and ________ the market will occur.
A)negative;entry into
B)negative;exit from
C)positive;entry into
D)positive;exit from

Quizplus · Accepted Answer

Sylvie's Shampoo Company will earn a positive economic profit because the price is greater than the average total cost at the profit-maximizing output. Entry into the market will occur because the positive economic profit will attract new firms to the industry.