$2$

Multiple Choice

$5$ points

This graph shows a monopolistic competitor

in the short run breaking even.

in the short run taking a loss.

in the short run making a profit.

in the long run breaking even.

in the long run taking a loss.

in the long run making a profit.

Buyers value high quality cars at $$22,000$ and low quality cars at $$14,500.$ Sellers value high quality cars at $$20,000$ and low quality cars at $$12,500.$ Under perfect information, a high quality car can trade at a price like $P_H=$ and a low quality car can trade at a price like $P_L=q,$

$20,500$; $12,000$

$20,500$; $13,000$

$19,500$; $12,000$

$19,500$; $13,000$