Monopolistic output choice

Reference no: EM1316630

1. Suppose a monopolistic competitor in long-run equilibrium has a constant marginal cost of $6 and faces the demand curve given in the following table:

Q	P	MC
20	2	6
18	4	6
16	6	6
14	8	6
12	10	6
10	12	6
8	14	6
6	16	6

a. What output will the firm choose?
b. What will be the monopolistic competitor's average fixed cost at the output it chooses?

2. The pizza market is divided as follows: Pizza hut20.7%, Domino's 17.0, Little Caesar's6.7, Pizza Inn2.2 Round Table2.0, all others51.4,

a. How would you describe its market structure?
b. What is the approximate Herfindahl index?
c. What is the four-firm concentration ratio?

Reference no: EM1316630

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