Profit Maximization

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Part 2 of 2 – Profit Maximization for a Firm in Monopolistic Competition     (Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm’s fixed costs and reduces cost from ATC to ATC’ Before the innovation reduced the cost, the firm’s maximum economic profit was:    A.$0.  B.$30.  C.$750.  D.$4,500.
 
Part 2 of 2 – Profit Maximization for a Firm in Monopolistic Competition
Profit Maximization for a Firm in Monopolistic Competition
    (Exhibit: Profit Maximization for a Firm in Monopolistic Competition.) Suppose that an innovation reduces a firm’s fixed costs and reduces cost from ATC to ATC’ After the innovation reduced the cost, the firm’s maximum economic profit is:    A.$0.  B.$30.  C.$1,500.  D.$3,000.
Part 2 of 2 – Profit Maximization for a Firm in Monopolistic Competition
Profit Maximization for a Firm in Monopolistic Competition
    (Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm’s fixed costs and reduces cost from ATC to ATC’ Suppose further that after the innovation reduced the cost to ATC?, it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:    A.$1,700.  B.$1,190.  C.$3,060.  D.$3,400.
 
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