Demand and Cost Data for Will's Beach Ball Company

Price Demand Data Quantity Cost Data Output Total Cost

$11 6 6 $48

$10 7 7 $52

$9 8 8 $57

$8 9 9 $63

$7 10 10 $70

Table $26.1$ A Monopolistically Competitive Firm Refer to Table 26.2.At the profit-maximizing output and price, Sylvie's Shampoo Company.will earn a ________ economic profit, and ________ the market will occur.

Question

Demand and Cost Data for Will's Beach Ball Company

Price	Demand Data Quantity	Cost Data Output	Total Cost
$11	6	6	$48
$10	7	7	$52
$9	8	8	$57
$8	9	9	$63
$7	10	10	$70

Table $26.1$ A Monopolistically Competitive Firm Refer to Table 26.2.At the profit-maximizing output and price, Sylvie's Shampoo Company.will earn a ________ economic profit, and ________ the market will occur.

Quizplus · Accepted Answer

To determine the profit-maximizing output and price, we need to analyze the marginal cost (MC) and marginal revenue (MR). The profit-maximizing condition for a firm is where MC = MR. Without explicit MC and MR data, we infer from the demand and cost data. As the price decreases, demand increases, indicating a downward-sloping demand curve typical for monopolistically competitive firms. The firm will choose a price and output where it can maximize its profit, considering its downward-sloping demand curve and cost structure. Positive economic profit attracts new firms into the market, leading to entry.