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(Solved): Presto Cleaners, a small dry-cleaning shop, operates in a monopolistically competitive market, with ...



Presto Cleaners, a small dry-cleaning shop, operates in a monopolistically competitive market, with revenues and costs as shown in the table below. a) Fill in the table. b) What is Presto’s profit-maximizing or loss-minimizing quantity of output rounded to the nearest 1000 shirts, and what price does it charge? c) What is Presto’s short-run profit or loss? d) What will happen to Presto’s or loss in the long-run? Price ($ per shirt) Quantity (shirts per month) Total revenue ($) Marginal Revenue ($ per shirt) Total cost ($) Marginal Cost ($ per shirt) $5.00 0 $ ------ $------ $3,000 $------ 4.50 1000 ------ ------ 5000 ------ 4.00 2000 ------ ------ 6250 ------ 3.50 3000 ------ ------ 8000 ------ 3.00 4000 ------ ------ 10300 ------ 2.50 5000 ------ ------ 15000 ------



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