Posted by
**hiten** on
.

Suppose a monopolistically competitive firm’s demand is given by

P = 100 – 2Q

And its cost function is given by

TC = 5 + 2Q

a. Find the profit maximizing quantity, price, and total profit level.

b. Is this a long-run or a short-run outcome? How do you know?

c. Assuming that the slope of the demand curve remains constant, what will be the long-run equilibrium price and quantity for the firm?