Question 1 D. Assume that the cellular telephone industry is monopolistically competitive
a. Assume that cellular telephone manufacturers are earning short-run economic profits. Draw a correctly labeled graph for a typical firm in the industry and show each of the
following
1. The profit-maximizing output and price
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it. The area representing economic profit
b. At the profit maximizing price you identified in part (a), would the typical firm's demand curve be price inelastic? Explain.
c. Given the information in part (a), what happens to the demand curve for the typical firm in the long run? Explain.
d. Using a new correctly labeled graph, show the profit-maximizing output and price for the typical firm in the long run.
e. Does the typical form produce an output level that minimizes its average total cost in the long run?
f. In long-run equilibrium, does the typical firm produce the allocatively efficient level of output? Explain.

Shelby company produces three products: product x, product y, and product z. data concerning the three products follow (per unit): product x product y product z selling price $ 85 $ 65 $ 75 variable expenses: direct materials 25.50 19.50 5.25 labor and overhead 25.50 29.25 47.25 total variable expenses 51.00 48.75 52.50 contribution margin $ 34.00 $ 16.25 $ 22.50 contribution margin ratio 40 % 25 % 30 % demand for the company’s products is very strong, with far more orders each month than the company can produce with the available raw materials. the same material is used in each product. the material costs $8 per pound, with a maximum of 4,400 pounds available each month. required: a. compute contribution margin per pound of materials used. (round your intermediate calculations and final answers to 2 decimal places.) contribution margin per pound product x $ product y $ product z $ b. which orders would you advise the company to accept first, those for product x, for product y, or for product z? which orders second? third? product x product y product z