Suppose a firm has the following short-run demand and cost schedule for a particular product.
Q = 200 - 5P
TC = 400 + 4Q
a) At what price should this firm sell its product?
b) If this is a monopolistically competitive firm, what do you think would start to happen in the long run? Explain.
c) Suppose in the long run, the demand shifted to Q = 100 -5P. What should the firm do? Explain.