Suppose that an oligopolistically competitive restaurant is currently serving 260 meals per day (the...

Question

Suppose that an oligopolistically competitive restaurant is currently serving 260 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $13 per meal.

What is the size of this firm’s profit or loss? $

Will there be entry or exit? (Click to select)ExitEntry

Will this restaurant’s demand curve shift left or right? (Click to select)LeftRight

In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $9.

What is the size of the firm’s profit?

Instructions: Enter a numeric value for your answer.

Suppose that the allocatively efficient output level in long-run equilibrium is 210 meals. Is the deadweight loss for this firm greater than or less than $60?

(Click to select)GreaterLess than $60.

David · Accepted Answer

Suppose that an oligopolistically competitive restaurant is currently serving 260 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $13 per meal. 
What is the size of this firm’s profit or loss?

Suppose that an oligopolistically competitive restaurant is currently serving 260 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay...

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