Figure 10.5 shows the demand, marginal revenue, and cost curves for a monopolistically competitive firm. The profit-maximizing (or loss-minimizing) price for the firm is _____.
Figure 10.5.

Question

Figure 10.5 shows the demand, marginal revenue, and cost curves for a monopolistically competitive firm. The profit-maximizing (or loss-minimizing) price for the firm is _____.​ ​
Figure 10.5.
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Quizplus · Accepted Answer

At the profit-maximizing output level, the marginal revenue (MR) must be equal to the marginal cost (MC). From the graph, we can see that the MC curve intersects the MR curve at a quantity of around 20 units, and at this level, the price would be $3.25. Therefore, the best choice is B) $3.25.

Figure 105 Shows the Demand, Marginal Revenue, and Cost Curves for for a Monopolistically