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3:39 AM Wed Oct 4 ng.cengage.com MindTap - Cengage Learning e O 6-1 Quiz - ECO-201-T1097 Microeconomics... CENGAGE I MINDTAP Module Six Quiz 9 . Perfect Competition The market for peanut butter in Nutville is monopolistically competitive and in long-run equilibrium. S 220/0(iZ) Course Hero Q Search this course A-Z The following graph shows the marginal-cost (MC) curve and the average-total-cost (ATC) curve for a peanut-butter-producing firm. It also shows thf demand curve and marginal-revenue (MR) curve faced by a firm operating in a monopolistically competitive environment. On the following graph, use the black point (plus symbol) to show the profit-maximizing output and price for a typical firm operating in a monopolistically competitive environment. Demand o 0 c Profit Max Under MC Perfect Comp. Outcome TC Quantity One day, consumer advocate Skippy Jif discovers that all brands of peanut butter in Nutville are identical. Thereafter, the market becomes perfectly competitive and again reaches its long-run equilibrium. On the previous graph, use the grey point (star symbol) to show the market price in this case and the quantity produced by each firm. Which of the following statements are true for a typical firm in this market given the transition from monopolistic competition to perfect competition? Check all that apply. o Average total cost decreases. o Profit increases. o The quantity remains unchanged. o Marginal cost increases. o The price increases. Grade It Now Save & Continue