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Costume Jewelry Is Produced in a Monopolistically Competitive Market

Question 63

Multiple Choice

Costume jewelry is produced in a monopolistically competitive market.A profit-maximizing producer finds that marginal revenue equals marginal cost equals $4.50 when output is 700 rings.An economist studying this information can conclude that


A) the producer is charging a price of $4.50.
B) economic profit is $3,150.
C) the producer charges a price greater than $4.50.
D) new firms will not want to enter this market.
E) this producer should produce more than 700 rings.

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