Establishes a long-run equilibrium

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Reference no: EM13999991

Assume that in short-run equilibrium, a particular monopolistically competitive firm charges $10 for each unit of its output and sells 48 units of output per day. The average total cost (ATC) for those 48 units is $4.

Round your answers below to the nearest whole number.

How much revenue will it take in each day? $

What will be its economic profit or loss?

Next, suppose that entry or exit occurs in this monopolistically competitive industry and establishes a long-run equilibrium.

If the firm’s daily output remains at 48 units, what price will it be able to charge? $

What will be its economic profit or loss?

Reference no: EM13999991

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