Assume a monopolistic competitor and the long-run equilibrium has a constant marginal cost of six dollars and faces the demand curve given in the following table:
Price Quantity
14 2
12 4
10 6
8 8
6 10
4 12
2 14
0 16
1. Explain what output will the firm choose?
2. Discuss what will the monopolistic competitor's average fixed cost at the output it chooses?