Table 9.3
$$\begin{array} { | c | c | c | c | c | }
\hline \text { Quantity } & \begin{array} { c }
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c }
\text { Total Revenue } \
\text { (dollars) }
\end{array} & \begin{array} { c }
\text { Total Variable } \
\text { Cost } \
\text { (dollars) }
\end{array} & \begin{array} { c }
\text { Total Cost } \
\text { (dollars) }
\end{array} \
\hline 0 & 21 & 0 & 0 & 50 \
\hline 1 & 20 & 20 & 16 & 66 \
\hline 2 & 19 & 38 & 31 & 81 \
\hline 3 & 18 & 54 & 45 & 95 \
\hline 4 & 17 & 68 & 59 & 109 \
\hline 5 & 16 & 80 & 75 & 125 \
\hline 6 & 15 & 90 & 93 & 143 \
\hline 7 & 14 & 98 & 112 & 162 \
\hline 8 & 13 & 104 & 140 & 190 \
\hline 9 & 12 & 108 & 180 & 230 \
\hline 10 & 11 & 110 & 230 & 280 \
\hline
\end{array}$$ Table 9.3 shows the demand and cost schedules for a monopolistically competitive firm.
-Refer to Table 9.3.What is the best course of action for the firm in the short run?

Question

Table 9.3
 $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Quantity } & \begin{array} { c } 
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Total Revenue } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Total Variable } \
\text { Cost } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Total Cost } \
\text { (dollars) }
\end{array} \
\hline 0 & 21 & 0 & 0 & 50 \
\hline 1 & 20 & 20 & 16 & 66 \
\hline 2 & 19 & 38 & 31 & 81 \
\hline 3 & 18 & 54 & 45 & 95 \
\hline 4 & 17 & 68 & 59 & 109 \
\hline 5 & 16 & 80 & 75 & 125 \
\hline 6 & 15 & 90 & 93 & 143 \
\hline 7 & 14 & 98 & 112 & 162 \
\hline 8 & 13 & 104 & 140 & 190 \
\hline 9 & 12 & 108 & 180 & 230 \
\hline 10 & 11 & 110 & 230 & 280 \
\hline
\end{array}$$ Table 9.3 shows the demand and cost schedules for a monopolistically competitive firm.
-Refer to Table 9.3.What is the best course of action for the firm in the short run?

Quizplus · Accepted Answer

In the short run, the firm should stay in business because it covers some of its fixed cost. The firm's total revenue is greater than its variable cost, which means that it is contributing to covering some of its fixed cost. If the firm were to shut down, it would have to incur a loss of its fixed cost without any revenue to offset it. Lowering the price or advertising may increase sales, but it may not necessarily lead to higher profits since the demand is relatively elastic and the cost of production is high.

Table 93 Table 93 Shows the Demand and Cost Schedules for a Monopolistically