The cost of producing each bottle of a certain brand of shampoo is $0.25.If the market for shampoo is monopolistically competitive and the demand for shampoo is inelastic,a manufacturer who charges $0.35 for each bottle will ________.

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If the demand for shampoo is inelastic, then consumers are not very price sensitive, and a price increase is unlikely to significantly decrease the quantity demanded. Therefore, the manufacturer can charge $0.35 for each bottle, which is more than the cost of production ($0.25). This means that the manufacturer will earn a positive economic profit of $0.10 per bottle. Option A is incorrect because the manufacturer will make a profit and will not shut down production. Option B is incorrect because the manufacturer is earning a profit and has no reason to exit the industry. Option D is incorrect because the total revenue includes the cost of production, and the manufacturer's revenue per bottle is $0.35, not $0.10.

The Cost of Producing Each Bottle of a Certain Brand