Once a firm in monopolistic competition has determined how much to produce, the firm determines its price by referring to its
A) demand curve.
B) marginal revenue curve.
C) average total cost curve.
D) average variable cost curve.
E) marginal cost curve.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms have some degree of market power and can influence the price of their product. To determine the price, the firm will refer to its demand curve, which shows the relationship between the price of the product and the quantity demanded by consumers. The firm will then set a price that maximizes its profit, taking into account its production costs and the level of competition in the market. Therefore, the correct answer is A.

Once a Firm in Monopolistic Competition Has Determined How Much