# In this exhibit (Profit Maximization for a Firm in Monopolistic Competition), suppose that an inn… 1 answer below »

Monopolistic Competition Price and cost $40 MC ATC 30 23 ATC 20 10 MR ARED 150 200 Quantity per day ” src=”https://files.transtutors.com/cdn/questions/transtutors006/images/transtutors006_604d72dd-76ee-46c5-8447-eda546f43ce8.png”>

In this exhibit (Profit Maximization for a Firm in Monopolistic

Competition), suppose that an innovation reduces a firm’s fixed

costs and reduces cost from ATC to ATC’ before the innovation

reduced the cost, the firm’s maximum economic profit was:

Select one:

a. $0.

b. $30.

c. $750.

d. $4,500.

In this exhibit (Monopoly Through Collusion), given the duopoly

industry illustrated in the exhibit, if the two firms colluded to

maximize their joint profits, the market price they would set would

be _______ and each firm’s economic profit would be _______ .

Select one:

a. P_{2}; given by the area of the rectangle bounded by

P_{1}P_{2}EF = FEBG

b. P_{1}; P_{1}P_{3}AF

c. P_{3}; given by the area of the rectangle bounded by

0P_{3}AQ_{1}

d. P_{2}; given by the area of the rectangle bounded by

P_{1}P_{2}BG

Exhibit: Profit Maximization for a Firma in Monopolistic Competition Price and cost $40 MC ATC 30 23 ATC 20 10 MR ARED 150 200 Quantity per day