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Monopolistic Competition Problem SetUse the following information to answer questions 1 through 5:The graph below shows the demand curve and cost data for a firm operating in a monopolistic competition.1. Curve 2 shows:Marginal RevenueMarginal CostsDemand Curve2. Curve 3 shows:Marginal RevenueMarginal CostsDemand Curve3. Curve 1 shows:Marginal RevenueMarginal CostsDemand Curve4. The profit maximizing quantity for this firm is:10155305. What price will this firm set in order to maximize profits (or minimize losses)?303525106. The table below shows data for the production of Avocados for an individual firm in a monopolistic competition.Quantity of AvocadosPriceTotal CostsMR100550485004502005009350035030045014350025040040019850015050035025850050600300323500-50Given this data, complete the table:Quantity of AvocadosTotal Revenue (TR)ProfitMarginal Revenue (MR)Marginal Costs (MC)100--200300400500600Use the following information to answer questions 7 through 9:The table below shows data for the production of Avocados for an individual firm operating in a monopolistic competition.Quantity of AvocadosPriceTotal Costs10055048500200500935003004501435004004001985005003502585006003003235007. At what quantity are marginal revenues equal to marginal costs?8. What is the profit maximizing quantity?NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!9. What is the profit maximizing price?NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!Use the following information to answer questions 10 through 12:Consider the following prisoner's dilemma with the payoff matrix (Numbers represents years in prison):10. What is the dominant strategy for player A?Remain silent.There is no dominant strategy.Confess.11. What is the dominant strategy for player B?Remain silent.There is no dominant strategy.Confess.12. What is the Nash Equilibrium (in pure strategy)?25, 2540, 510, 105, 40There is no Nash equilibrium. ................
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