A monopolistic competitor has a constant marginal cost of $8 and the accompanying demand table. What output le

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A monopolistic competitor has a constant marginal cost of $8 and the accompanying demand table. What output le

2007-03-05 06:46:18 · 2 answers · asked by lint_foreman 1 in Social Science ➔ Economics

2 answers

Monopolistic competitors have a degree of price control, so their marginal revenues will slope downward under their demand curve. If you are not given a formula for the marginal revenue with the demand table, assume that it slope downward about twice as fast. When marginal revenue crosses marginal cost of $8, that will be the output level it chooses, and the price corresponding to that output will be the price that is charged.

2007-03-08 01:40:12 · answer #1 · answered by theeconomicsguy 5 · 0⤊ 0⤋

The least he would ever charge would be more than $8.

2007-03-05 21:52:20 · answer #2 · answered by Santa Barbara 7 · 0⤊ 0⤋