Question

1-In the figure, the firm is a monopolistically competitive firm. In the long run, its economic

profit will be

A.zero.

B.some amount that cannot be determined without more information

.C.between zero and $50 per day.

D.greater than $50.0 per day

2-in the figure, the firm’s economic

A.profit will be greater than $30.01 per day.

B.loss will be $30 or less per day.

C.loss will be greater than $30 per day.

D.profit will be between $0 and $30 per day

he below graph shows the monopolistically competitive firm in long-run equilibrium. The difference between Q1 and Q2 is called ______ and the reason the firm will not produce at Q1 is ______.

A.Limited capacity; the firm cannot maintain Q1 level of output in long-run

B.Nash level of capacity; Q1 level of output is a short-run equilibrium

C.Optimal capacity; the firm does not have enough capacity to produce at this level

D.Excess capacity; expanding beyond Q2 lowers profits

Price and costs (dollars per unit)
MC
ATC
MR
D
20
40
60
80
100
120
Quantity (units per day)
Macroeconomics