a. Draw a diagram showing Sparkle痴 demand curve, marginal revenue curve, average cost
curve, and marginal cost curve. Label Sparkle痴 profit-maximizing output and price.
b. What is Sparkle痴 profit? Explain.
c. On your diagram, show the consumer surplus derived from the purchase of Sparkle
toothpaste. Also show the deadweight loss relative to the efficient level of output.
d. If the government forced Sparkle to produce the efficient level of output, what would
happen to the firm? What would happen to Sparkle痴 customers?You do not give adequate data to answer these questions. Please repost with the needed data, and we will do our best to help you.
Thanks for asking.I believe I gave adequate data. It says that are in long-run equilibrium and they are in a monopolistically competitive market, because that's what the market for toothpaste is. I got the answer already, but thank you for your reply.
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