Sparkle, One of Many Firms in the Market for Toothpaste

question 193

Essay

Sparkle, one of many firms in the market for toothpaste, is in long-run equilibrium.Sparkle has a small market share and has been in business for a long time.
a.Identify the market structure in which Sparkle operates.Explain your answer.
b.What is Sparkle's profit or loss? Explain your answer.If you cannot determine the profit or loss, explain what information is missing.
c.Draw a diagram showing Sparkle's demand curve, marginal revenue curve, average total cost curve, and marginal cost curve.Label your diagram.

---

Definitions:

Weekly Demand

The total quantity of goods or services that consumers are willing and able to purchase over the course of a week.

Customer Service Level

A measure of the quality of service provided to customers, often evaluated through metrics like response time, satisfaction rates, and resolution effectiveness.

Lot Size

The quantity of units produced or purchased in a single batch or order, affecting production costs and inventory levels.

Cost of Overstocking

The expenses associated with holding excessive inventory, such as storage costs, insurance, and potential obsolescence.