Question: A firm had the following Revenue and Cost functions under monopolistic competition:
Revenue function:
AR = P = 500 - 0.2 Q
MR = 500 - Q
Cost functions:
TC = 5,000 + 50 Q
MC = 50
From the above information, calculate:
Equilibrium price
Equilibrium quantity
Level of profit
Also represent the equilibrium price and quantity diagrammatically.