A monopolistic competitor has fixed costs of $100 and a
constant $1 marginal cost of production.
A) Will this firm earn shortrun monopoly profits if it produces
and sells 300 units at a price of $2.00 each?
B) What can we expect to happen to this monopolistic
competitor in the long run?

Question

A monopolistic competitor has fixed costs of $100 and a
constant $1 marginal cost of production.
A) Will this firm earn short­run monopoly profits if it produces
and sells 300 units at a price of $2.00 each?
B) What can we expect to happen to this monopolistic
competitor in the long run?

Quizplus · Accepted Answer

The Answer of A monopolistic competitor has fixed costs of $100 and a
constant $1 marginal cost of production.
A) Will this firm earn short­run monopoly profits if it produces
and sells 300 units at a price of $2.00 each?
B) What can we expect to happen to this monopolistic
competitor in the long run?

A Monopolistic Competitor Has Fixed Costs of $100 and a