i) Explain how Quantity to be sold in the above market is determined and explain possible...

  

Transcribed Image Text:

i) Explain how Quantity to be sold in the above market is determined and explain possible reason that would make this market structure realize the profit observed. 3mks ii) Is this type of market structure a price taker or a price setter? Motivate your answer. 4mks P₂ AC Short-run equilibrium of the firm under monopolistic competition MC MR AC AR-D i) Explain how Quantity to be sold in the above market is determined and explain possible reason that would make this market structure realize the profit observed. 3mks ii) Is this type of market structure a price taker or a price setter? Motivate your answer. 4mks P₂ AC Short-run equilibrium of the firm under monopolistic competition MC MR AC AR-D

Answer rating: 100% (QA)

SOLUTION i In the given market the quantity to be sold is determined by the intersection of the marginal revenue MR curve and the marginal cost MC curve The MR curve is the change in total revenue res... View the full answer