Table 9.2
$$\begin{array} { | c | c | c | c | }
\hline \begin{array} { c }
\text { Quantity } \
\text { (cases) }
\end{array} & \begin{array} { c }
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c }
\text { Total Revenue } \
\text { (dollars) }
\end{array} & \begin{array} { c }
\text { Total Cost } \
\text { (dollars) }
\end{array} \
\hline 1 & 75 & 75 & 60 \
\hline 2 & 70 & 140 & 85 \
\hline 3 & 65 & 195 & 105 \
\hline 4 & 60 & 240 & 115 \
\hline 5 & 55 & 275 & 130 \
\hline 6 & 50 & 300 & 155 \
\hline 7 & 45 & 315 & 190 \
\hline 8 & 40 & 320 & 230 \
\hline 9 & 35 & 315 & 280 \
\hline
\end{array}$$ Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 9.2 shows the firm's demand and cost schedules.
-Refer to Table 9.2.What is likely to happen to the product's price in the long run?

Question

Table 9.2
 $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { (cases) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Total Revenue } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Total Cost } \
\text { (dollars) }
\end{array} \
\hline 1 & 75 & 75 & 60 \
\hline 2 & 70 & 140 & 85 \
\hline 3 & 65 & 195 & 105 \
\hline 4 & 60 & 240 & 115 \
\hline 5 & 55 & 275 & 130 \
\hline 6 & 50 & 300 & 155 \
\hline 7 & 45 & 315 & 190 \
\hline 8 & 40 & 320 & 230 \
\hline 9 & 35 & 315 & 280 \
\hline
\end{array}$$ Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 9.2 shows the firm's demand and cost schedules.
-Refer to Table 9.2.What is likely to happen to the product's price in the long run?

Quizplus · Accepted Answer

In the long run, new firms are likely to enter the monopolistically competitive market, increasing competition and leading to firms reducing prices to maintain market share. This would cause the price of Power On to fall.

Table 92 Eco Energy Is a Monopolistically Competitive Producer of a Sports