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saw5 [17]
3 years ago
9

Suppose Susan owns a business that operates in a market characterized by monopolistic competition. Susan's profit-maximizing pri

ce is $12, her profit-maximizing output is 900 units per week, and her profits are $1,800 per week. Susan decides that she needs more profits and therefore raises her price to $15. At the new price of $15:____________
A) profits will increase.
B) profits will remain at $1,800.
C) marginal revenue will be greater than marginal cost.
D) marginal revenue will be less than marginal cost
Business
2 answers:
nadya68 [22]3 years ago
7 0

Answer:

The answer to this question is Option C.

marginal revenue will be greater than marginal cost. 

Explanation:

Monopolistic competition characterizes an industry in which many firms offer products or services that are similar, but not perfect substitutes.

There is  low barrier to entry and exit in a monopolistic competitive industry and the decisions of any one firm do not directly affect those of its competitors.In a monopolistic competition, there is  a negative relationship between price and quantity demanded.

 

If Susan increases her price to $15, marginal revenue will be greater than marginal cost.  

Hence the answer is Option C

densk [106]3 years ago
4 0

Answer:

C) marginal revenue will be greater than marginal cost. 

Explanation:

A monopolistic competition is when there are many buyers of differentiated goods. The demand curve of a monopolistic competition is downward sloping. This downward sloping demand curve indicates that there's a negative relationship between price and quantity demanded.

If Susan increases her price to $15, all things being equal, Quanitity demanded would fall and her profit would fall.

At the profit maximising price of $12, marginal revenue is equal to marginal cost. So if price is increased to $15, marginal revenue would exceed marginal cost.

I hope my answer helps you

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8 0
1 year ago
Assume Ireland and Mali can both produce grain and dates, and that the only limited resource is the farming labor force, meaning
likoan [24]

Answer:

a. Which country has the absolute advantage in producing dates?

Mali

b. Which country has the absolute advantage in producing grain?

None

c. Which country has the competitive advantage in producing dates?

Mali

d. Which country has the comparative advantage in producing grain?

Ireland

Explanation:

Opportunity cost of producing dates:

Ireland = 10 / 5 = 2 tons of grains

Mali = 10 / 25 = 0.4 tons of grains

Opportunity cost of producing grains:

Ireland = 5 / 10 = 0.5 tons of dates

Mali = 25 / 10 = 2.5 tons of dates

7 0
3 years ago
As a graphic artist, Randy has just finished a new calendar. The calendar cost him $1.00 for the glossy paper, $3.00 for the six
Yanka [14]

Answer:

Break-even units = 66.67 units

Explanation:

<em>Break-even point is the level of activity that achieves no profit or loss. At this level profit is zero because the the total revenue is equal to total cost.</em>

<em>The break-even point is calculated as </em>

<em>Units to achieve target profit = (Total general fixed cost for the period + target profit)/ contribution per unit</em>

Contribution per unit = Selling Price - Variable cost

Contribution per unit = 15- (1+3+0.50) = 10.5

Fixed cost = 500 +( 50× 4) = 700

So the units requited to achieve break-even point:

Break-even point =  700/10.5

                            = 66.67 units

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