1.How short-run profit or losses induce entry or exitFantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC).on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. PLEASE HELP ME Given the profit-maximizing choice of output and price, the shop is makingprofit, which means there areshops in the industry relative to the long-run equilibrium.Now consider the long run in which bike manufacturers are free to enter and exit the market. 500450Monopolistically Competitive Outcome400350ATC300Profit or Loss250200150100MC50MRDemand50100150200250300350400450500QUANTITY (Bikes)PRICE (Dollars per bike)

Monopolistic competition is a market structure that involves a large number of buyers and sellers.…

Given the profit-maximizing choice of output and price, the shop is making profit, which means there are shops in the industry relative to the long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market.

Given the profit-maximizing choice of output and price, the shop is making profit, which means there are shops in the industry relative to the long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter11: Marketing And Distribution

Section: Chapter Questions

Problem 20AA

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1.How short-run profit or losses induce entry or exit

Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC).on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company.

PLEASE HELP ME

Given the profit-maximizing choice of output and price, the shop is making
profit, which means there are
shops in the industry relative to the long-run equilibrium.
Now consider the long run in which bike manufacturers are free to enter and exit the market.

500
450
Monopolistically Competitive Outcome
400
350
ATC
300
Profit or Loss
250
200
150
100
MC
50
MR
Demand
50
100
150
200
250
300
350
400
450
500
QUANTITY (Bikes)
PRICE (Dollars per bike)

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

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