MATCHING: Place only one letter in each space and use any one letter only once. One point each.

____ 1. Cause of increasing long-run A. Normal Profit
average total costs
B. Variable Cost
____ 2. Raw Materials
C. Diminishing Returns
____ 3. Total Revenue -
(Explicit + Implicit Costs) D. Pure Competition

____ 4. Market structure where many firms E. Fixed Cost
produce a differentiated product
F. Economic Profit
____ 5. The amount the entrepreneur could
earn elsewhere G. Diseconomies of Scale

____ 6. Change in total variable cost as H. Marginal Cost
output changes by one unit
I. Monopolistic Competition

Suppose a firm in monopolistic competition has the following demand schedule. Suppose the marginal cost is a constant $70. How much will the firm produce? Is this a long- or short-run situation? If the firm is earning above-normal profit, what will happen to this demand schedule?
Price Quantity Price Quantity
--------------

A firm produces output at a cost of: C = 50 + 20 X and sells it at a price of P = 220 - 4 X
1. Determine the profit maximizing equilibrium output, price and the total profit under two conditions:
1.1 A firm is a monopolist (15)
1.2 A firm under perfect competition (15)
See attached file for full problem description.

Market Equilibrium and Profit Maximization under Perfect Competition
The supply and demand equations for a hypothetical perfectly competitive market are given by
QS = -100 + 3P and QD = 500 - 2P.
a) Find the market equilibrium price algebraically.
b) In Excel, use the above equilibrium price and the cost data fro

The optimum market quantitiy in a competitive market if:
P=100-.5q
MR = 100-q
Ac= 10$ per unit
Is this the way you calculate it? If not, how do you do it?
Profit =MC=MR
10 = 100-q
90 = q
How do you then calculate the quantity brought to market by a monopolist?

Using non-profit organizations, give detailed information on how Competitor Analysis works with non-profit organizations.
How would the organization identify the competition? How would it effect the non-profit organization? What would be ways to compete with the competition?

Answer the next questions on the basis of the following cost data for a firm in pure competition:
OUTPUT ------ TFC ---------- TVC
0 $100.00 0.00
1 100.00 70.00
2 100.00 120.00
3 100.00 150.00
4

You are the manager of a monopolistically competitive firm. The present demand curve you face is P=100-4Q. Your cost function is C(Q)=50+8.5Q2 (That's Q squared).
a. What level of output should you choose to maximize profits?
b. What price should you charge?
c. What will happen in your market in the long run? Explain.

Assume that Smith Inc. and Wang, Inc. compete in an oligopolistic setting.
They produce a homogeneous product and face the following industry demand curve:
P = 20 - .01Q
Where Q = Q1 + Q2
a. Each firm faces a marginal cost of $10. Find the equilibrium quantity produced by each firm in the Cournot equilibrium. What

I would really apriciate it if you could explain the answer in a detailed way with graphs.Thank you.
Firms in pure competition take the market price as given and produce the level of output which will maximize their profits.This quantity can be determined graphically by using either the total revenue, total cost approach or