The horizontal axis is labeled quantity of output in units. The numbers marked on the horizontal axis from left to right are 10, 20, 35, 45, and 50. The vertical axis is labeled dollars. The numbers marked on the vertical axis from bottom to top are 50, 52, 55, 65, 80, and 90. The curve labeled M C begins at the bottom left, goes down and to the right, reaches the minimum, goes up and to the right, passes through (45, 55), further goes up and to the right, and ends at the top-right. The curve labeled A T C begins at a point on the top-left, goes vertically down, passes through (10, 80), goes down and to the right with decreasing steepness until a point, intersects M C at a point, goes up and to right with increasing steepness, passes through (50, 52), and ends at the top-right. A falling line labeled D begins at the top-left, passes through (10, 90), (20, 80), (35, 65), (45, 55), (50, 52), and ends at the bottom right. Another falling line labeled M R begins at a point below 80 and near the vertical axis, goes down steeply, passes through points near (10, 70), (20, 57), and (30, 52), crosses M C at (35, 45), and ends at the bottom right.

In the short run, this monopolistically competitive firm will set the price at

A. $65 and produce 35 units of output.

B. $50 and produce 35 units of output.

C. $55 and produce 45 units of output.

D. $52 and produce 50 units of output.

 

Transcribed Image Text:

90 80 Dollars ($) слолып о 5520 65 55 52 50 I I 1 1 1 1 1 1 1 I MC MR 35 45 50 Quantity of Output (Units) 0 10 20 ATC D 90 80 Dollars ($) слолып о 5520 65 55 52 50 I I 1 1 1 1 1 1 1 I MC MR 35 45 50 Quantity of Output (Units) 0 10 20 ATC D

Answer rating: 100% (QA)

Based on the information given The firm operates in monopolistic competi... View the full answer