A monopolistically competitive firm is producing 50units of output in the short run where marginal cost is $3.00, average total costs are $5.00, price is $4.50, average variable cost is $4.00 and marginal revenue is $3.00.
a) Represent the above in a graph and calculate how much profit is the firm making? Explain.
b) What output recommendation would you make for the firm? Explain.