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Scenario: Monopolistically Competitive Firm
For a monopolistically competitive firm,the demand curve is given by Q = 160 - P,and the firm's cost functions are MC = 20 + 2Q and TC = 20Q + Q 2 + 20.
-(Scenario: Monopolistically Competitive Firm)Use Scenario: Monopolistically Competitive Firm.Given the information in the scenario,in the short run,this firm:

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The firm's profit is given by π = TR - TC = P * Q - (20Q + Q^2 + 20). Substituting the demand curve into the profit function, we get π = (160 - Q) * Q - (20Q + Q^2 + 20) = 140Q - Q^2 - 20. To find the profit-maximizing quantity, we set the derivative of the profit function equal to zero and solve for Q: dπ/dQ = 140 - 2Q = 0, so Q = 70. Substituting this quantity back into the profit function, we get π = 140 * 70 - 70^2 - 20 = $2,430.

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