Profit Maximization for a Firm in Monopolistic Competition
|
|||||||||||||
Part 2 of 2 – Profit Maximization for a Firm in Monopolistic Competition |
Part 2 of 2 – Profit Maximization for a Firm in Monopolistic Competition |
(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm’s fixed costs and reduces cost from ATC to ATC’ Suppose further that after the innovation reduced the cost to ATC?, it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:
|