Suppose that a typical firm in a monopolistically competitive industry faces a demand curve given by:...

 

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Suppose that a typical firm in a monopolistically competitive industry faces a demand curve given by: q = 60 - (1/2)p, where q is quantity sold per week. The firm's marginal cost curve is given by: MC = 60. a. How much will the firm produce in the short run? b. What price will it charge? c. Draw the firm's demand, marginal revenue, and marginal cost curves. Does this solution represent a long-run equilibrium? Why or why not? Suppose that a typical firm in a monopolistically competitive industry faces a demand curve given by: q = 60 - (1/2)p, where q is quantity sold per week. The firm's marginal cost curve is given by: MC = 60. a. How much will the firm produce in the short run? b. What price will it charge? c. Draw the firm's demand, marginal revenue, and marginal cost curves. Does this solution represent a long-run equilibrium? Why or why not?