ICE (Dollars per scooter) 3. How short-run profit or losses induce entry or exit Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss 500 450 400 360 200 250 200 150 400 50 MC- ATC MR Demand 150 200 250 300 360 400 450 500 QUANTITY (Scooters) + Monopolistically Competitive Outcome Profit or Loss (?) Given the profit-maximizing choice of output and price, Citrus Scooters is earning sellers in the industry relative to the long-run equilibrium amount. Now consider the long run in which scooter manufacturers are free to enter and exit the market. profit, which means there are Show the possible effect of this free entry and exit by shifting the demand curve for a typical individual producer of scooters on the following graph. PRICE (Dollars per scooter) QUANTITY (Scooters) Demand Demand Which of the following statements are true for both monopolistically competitive markets and monopoly markets? Check all that apply. Price is above marginal cost. Firms are not price takers. Price equals average total cost in the long run. Firms earn zero profit in the long run.