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Suppose the market for toothpaste monopolistically competitive and in long-run

Question : Suppose the market for toothpaste monopolistically competitive and in long-run : 5088

Suppose the market for toothpaste is monopolistically competitive and in long-run equilibrium. The demand (and marginal revenue) for a firm in this industry is illustrated in the

Suppose the market for toothpaste is monopolistically competitive and in long-run equilibrium. The demand (and marginal revenue) for a firm in this industry is illustrated in the graph to the right, along with that firm's average total cost and marginal cost of producing its brand of toothpaste. Compared to perfectly competitive markets in the long-run, monopolistically competitive markets, such as that for toothpaste, are not allocatively efficient because they produce with excess capacity. For example, according to the graph, the monopolistically competitive firm has excess capacity of housand tubes. (Enter a numeric response using an integer Price and cost (dollars per tube) 200 180 160 MC 14 ATC 120 100 80 60 40 MR 00 200 300 400 500 600 700 800 900 1000 Quantity of toothpaste (per week in 1000s)

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Economics 10 Months Ago 101 Views
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