Refer to the information provided in Figure 15.5 below to answer the question(s) that follow. Figure 15.5
-Refer to Figure 15.5. If the Custom Sweater Shop is monopolistically competitive, what is the maximum level of average variable cost that would lead to the firm continuing to operate at the profit-maximizing level in the short run?

Question

Refer to the information provided in Figure 15.5 below to answer the question(s) that follow.  Figure 15.5
-Refer to Figure 15.5. If the Custom Sweater Shop is monopolistically competitive, what is the maximum level of average variable cost that would lead to the firm continuing to operate at the profit-maximizing level in the short run?

Quizplus · Accepted Answer

In monopolistic competition, a firm will continue to operate in the short run as long as the price (or average revenue) is greater than or equal to the average variable cost. If the profit-maximizing price is $46, the maximum average variable cost for the firm to continue operating is $46.

Refer to the Information Provided in Figure 15