Suppose that a monopolistically competitive restaurant is cu…

Suppose that a monopolistically competitive restaurant is currently selling 250 meals per day (the output where MR=MC).  At that output level, ATC per meal is $5 and consumers are willing to pay $8 per meal.  a) What is this firm’s profit or loss?  b) Will there be entry or exit into or out of the industry?  How do you know? c) What will happen to the restaurant market in the long run?  Hint:  you should be able to explain whether demand or supply shifts as a result.

Please show your calculations for the following: Suppose tha…

Please show your calculations for the following: Suppose that the most popular car dealer in your area sells 20 percent of all cars.  a)If all other car dealers sell either the same number (20%) or fewer,  what is the largest value that the  Herfindahl index could possibly take for car dealers in your area?  Show your calculation b) In that same situation,  what would  the four-firm concentration ratio be?  Show your calculations c) What would your result tell you about the market structure of car dealers in your area?