Monopolistic economics question? Need help!!!

Posted on 2014-11-21 05:28:00 in Economics by KERRY

Suppose Tommy Hilfiger's marginal cost of a jacket is a constant $100 and the total fixed cost at one of its stores is $2000 a day. The store sells 20 jackets a day, which is its profit maximizing number of jackets. The Tommy Hilfiger store now spends $2,000 a day advertising its jackets, and its profit maximizing number of jackets sold jumps to 50 a day.

a. can you say what happens to Tommy's markup? why or why not?
b. can you say what happens to the price of a Tommy Hilfiger jacket. Why or why not?
c. can you say what happens to Tommy's economic profit? Why or why not?

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