2.)In a monopolistic competitive market, the total cost function of a firm is TC = 45x106 + 0.5Q + 0.003Q2 (in which the

[answerhappygod]

2.)In a monopolistic competitive market, the total cost function
of a firm is TC = 45x106 + 0.5Q + 0.003Q2 (in which the QATC min =
122,474.49 units, ATCmin = 735.35 pesos) The average total cost and
marginal cost functions of the firm can be given as ATC = 45x106/Q
+ 0.5 + 0.003Q and MC = 0.5 + 0.006Q.
i.)The
demand for this firm is P = 100,000 -5Q (MR = 100,000 -10Q). What
is the Qπ max given the market demand(9,993.95 units)? What is the
ATCπ max (4,533.2 pesos)? What is the profit margin at the Qπ max
level(45,497.03)?
ii.)When a new
firm (with a slightly differentiated output but remains a close
substitute to the output of this firm) enters the market, the
demand for the firm shifts to P' = 60,000 -5Q(MR = 60,000 -10Q).
What is the Qπ max given the reduced market demand (5,996.35
units)? What is the ATCπ max (7,523.05 pesos)? What is the profit
margin at the Qπ max level(22,495.19 pesos)?
iii.)Do you agree that
the firm's profitability is likewise reduced by the entry of a new
firm? Answer yes or no but justify your answer using information
generated in this problem.
iv.)Do you agree that
the firm's productive efficiency is reduced by the entry of a new
firm? Answer yes or no but justify your answer using information
generated in this problem.