Which of the following is always true regarding a profit maximizing monopolistically competitive firm in short-run equilibrium?

Question

Quizplus · Accepted Answer

In short-run equilibrium, a profit maximizing monopolistically competitive firm produces where MR = MC, which ensures that the firm is producing the output level that maximizes profits. However, the price charged by the firm in a monopolistically competitive market is higher than the marginal cost (MC) and equals the marginal revenue (MR) for the firm. Therefore, in short-run equilibrium, the price charged by the firm (P) is not equal to the average total cost (ATC) or the marginal cost (MC).

Which of the Following Is Always True Regarding a Profit