Suppose that after long-run adjustments take place in the used-book market, the business in Problem 25-5 ends up producing 4 units of output. What are the market price and economic profits of this monopolistic competitor in the long run?

Problem 25-5

The table depicts the prices and total costs a local used-book store faces. The bookstore competes with a number of similar stores, but it capitalizes on its location and the word-of-mouth reputation of the coffee it serves to its customers. Calculate the store's total revenue, total profit, marginal revenue, and marginal cost at each level of output, beginning with the first unit. Based on marginal analysis, what is the approximate profit-maximizing level of output for this business?

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Output 0 1 556 A W NI 2 3 4 7 Price per Book ($) 6.00 5.75 5.50 5.25 5.00 4.75 4.50 4.00 Total Costs ($) 2.00 5.25 7.50 9.60 12.10 15.80 20.00 24.75