Draw a diagram for a firm in monopolistic competition, including the marginal cost, average total cost, marginal revenue, and demand schedules. Show what the equilibrium price and output will be.

In a monopolistically competitive market, the equilibrium price (Pe) and output (Qe) occur where the Marginal Cost (MC) curve intersects the Marginal Revenue (MR) curve. To draw a diagram for such a firm, follow these steps: 1. Plot an upward-sloping MC curve on a graph with price (P) on the vertical axis and quantity (Q) on the horizontal axis. 2. Plot a U-shaped Average Total Cost (ATC) curve above the MC curve, tangent to it at its minimum point. 3. Plot a downward-sloping Demand Schedule (D) curve from left to right on the graph. 4. Plot a downward-sloping MR curve that lies below the demand curve (D). 5. Locate the point where the MC curve intersects the MR curve and draw a vertical line down to the horizontal axis (Q) to find the equilibrium output (Qe). 6. Draw a horizontal line from the point where the vertical line intersects the demand curve (D) to the vertical axis (P) to find the equilibrium price (Pe). 7. Label the axes, the curves (MC, ATC, D, and MR), and the equilibrium price and output (Pe and Qe) to complete the diagram.