A Monopolistic Competitor Has Fixed Costs of $100 and a Constant

question 128

Short Answer

A monopolistic competitor has fixed costs of $100 and a constant $1 marginal cost of production.
I. Will this firm earn short-run monopoly profits if it produces and sells 300 units at a price of $2.00 each?
II. What can we expect to happen to this monopolistic competitor in the long run?

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