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This is a chance to earn more points (up to 20)

Economics

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This is a chance to earn more points (up to 20). Effort matters. You may still get a high score on this problem set even if every answer is not exactly correct as long as you are close and show that you really tried. 

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• Monopolistic Competition Problem Set

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  Monopolistic Competition Problem Set^[1]

   

   

  Use the following information to answer questions 1 through 5:

   

  The graph below shows the demand curve and cost data for a firm operating in a monopolistic competition.

   

  

   

   

  1. Curve 2 shows:

• Marginal Revenue
• Marginal Costs
• Demand Curve

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  2. Curve 3 shows:

• Marginal Revenue
• Marginal Costs
• Demand Curve

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  3. Curve 1 shows:

• Marginal Revenue
• Marginal Costs
• Demand Curve

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  4. The profit maximizing quantity for this firm is:

• 10
• 15
• 5
• 30

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  5. What price will this firm set in order to maximize profits (or minimize losses)?

• 30
• 35
• 25
• 10

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  10. What is the dominant strategy for player A?

• Remain silent.
• There is no dominant strategy.
• Confess.

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  11. What is the dominant strategy for player B?

• Remain silent.
• There is no dominant strategy.
• Confess.

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  12. What is the Nash Equilibrium (in pure strategy)?

• 25, 25
• 40, 5
• 10, 10
• 5, 40
• There is no Nash equilibrium.

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  ^[1] This assignment by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License. You can access an alternative means to plotting points at https://www.desmos.com/calculator.

   

   

   

   

   

  6. The table below shows data for the production of Avocados for an individual firm in a monopolistic competition.

  Quantity of Avocados	Price	Total Costs	MR
  100	550	48500
  200	500	93500
  300	450	143500
  400	400	198500
  500	350	258500
  600	300	323500

   

   

  Given this data, complete the table:

  Quantity of Avocados	Total Revenue (TR)	Profit	Marginal Revenue (MR)	Marginal Costs (MC)
  100			-	-
  200
  300
  400
  500
  600

   

   

   

   

  Use the following information to answer questions 7 through 9:

  The table below shows data for the production of Avocados for an individual firm operating in a monopolistic competition.

  Quantity of Avocados	Price	Total Costs
  100	550	48500
  200	500	93500
  300	450	143500
  400	400	198500
  500	350	258500
  600	300	323500

   

   

  7. At what quantity are marginal revenues equal to marginal costs?

   

   

  8.  What is the profit maximizing quantity?

  NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!

   

   

  9. What is the profit maximizing price?

  NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!

   

   

   

  Use the following information to answer questions 10 through 12:

  Consider the following prisoner's dilemma with the payoff matrix (Numbers represents years in prison):