The Table Below Shows the Demand and Cost Data Facing

question 239

Essay

The table below shows the demand and cost data facing "Velvet Touches," a monopolistically competitive producer of velvet throw pillows.
$\begin{array}{|c|c|c|c|c|c|}\hline \text { Quantity } & \text { Price } & \begin{array}{c}\text { Total } \\\text { Revenue }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Revenue }\end{array} & \text { Total Cost } & \begin{array}{c}\text { Marginal } \\\text { Cost }\end{array} \\\hline 1 & \$ 30 & & & \$ 32 & \\\hline 2 & 28 & & & 43 & \\\hline 3 & 26 & & & 53 & \\\hline 4 & 24 & & & 64 & \\\hline 5 & 22 & & & 76 & \\\hline 6 & 20 & & & 90 & \\\hline 7 & 18 & & & 106 & \\\hline 8 & 16 & & & 126 & \\\hline\end{array}$
Use the data to answer the following questions.
a.Complete the Total Revenue (TR),Marginal Revenue (MR),and Marginal Cost (MC)columns above.
b.What are the profit-maximizing price and quantity for Velvet Touches?
c.Is the firm making a profit or a loss? How much is the profit or loss? Show your work.
d.Is this firm operating in the long run or in the short run? Explain your answer.
e.If the firm's profit or loss is typical of all firms in the market for throw pillows,what is likely to happen in the future? Will there be more firms or will some existing firms leave the industry? Explain your answer.
f.What will happen to the typical firm's profit or loss after all entry/exit adjustments?

---

Definitions:

Certainty

The quality of being reliably true, definite, or clearly determined; an absence of doubt.

Similar Issue

A matter or problem that shares characteristics or is nearly identical to another.

Factual Differences

Distinctions based on actual events, circumstances, or evidence, rather than interpretations or opinions.

Critical Legal Studies

A school of thought that challenges and seeks to change mainstream legal practices and jurisprudence, focusing on social power dynamics, inequalities, and the arbitrary nature of laws.