Majestic Manicures operates in a monopolistically competitive market. Its inverse demand curve is P = 85 - 4Q, where Q is the number of daily manicures and P is the price per manicure. The total cost of providing manicures is TC = 13Q and marginal cost is $13.
a. What is Majestic Manicures' profit-maximizing output level and price?
b. What is Majestic Manicures' profit?
c. What will happen to Majestic Manicures' demand curve in the long run?
d. What is the expected long-run equilibrium price for manicures?
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85 - 8Q ...
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