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Monopolistic Competitor

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1. Suppose a monopolistic competitor in long-run equilibrium has a constant marginal cost of $6 and faces the demand curve given in the following table (see attachment).
a) What output will the firm choose?
b) What will be the monopolistic competitor's average fixed cost at the output it chooses?

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Solution Summary

The solution determines what the output choice will be and the average fix cost.

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