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You are the manager of a monopolistically competitive firm. The demand curve you face is P...

You are the manager of a monopolistically competitive firm. The demand curve you face is P = 100 – 3Q. Your total cost function is C(Q) = 50 + 7Q2. Hence, we know that MR = 100 – 6Q, and that MC = 14Q.

  1. What is the fixed cost?
  2. What level of output should you choose to maximize profit?
  3. What price should you charge?
  4. What is profit?
  5. What will happen in your market (your firm, other firms, etc.) in the long run? Explain.
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