3. You are hired as the consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maximizing profit? If not, what should it do to increase profit? If the firm is profit maximizing, is the firm in a long-run equilibrium? If not, what will happen to restore long-run equilibrium? a. PATC b. P>MC, P

3. You are hired as the consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maximizing profit? If not, what should it do to increase profit? If the firm is profit maximizing, is the firm in a long-run equilibrium? If not, what will happen to restore long-run equilibrium? a. PATC b. P>MC, P

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 1.1P

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You are hired as a consultant to a monopolisticallycompetitive firm. The firm reports the followinginformation about its price, marginal cost, andaverage total cost. Can the firm possibly bemaximizing profit? If not, what should it do toincrease profit? If the firm is maximizing profit, is themarket in a long-run equilibrium? If not, what willhappen to restore long-run equilibrium?a. P < MC, P > ATCb. P > MC, P < ATCc. P 5 MC, P > ATCd. P > MC, P 5 ATC
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3. You are hired as a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maximizing profit? If not, what should it do to increase profit? If the firm is maximizing profit, is the market in a long-run equilibrium? If not, what will happen to restore long-run equilibrium? a. P < MC, P > ATC b. P > MC, P < ATC c. P = MC, P > ATC d. P > MC, P = ATC
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