The diagram below shows a pharmaceutical firm's demand curve and marginal cost and marginal revenue curves for a new heart medication for which the firm holds a 20- year patent on its production.
FIGURE 10- 5
-Economic profit for a monopolistic firm will equal zero when
A) price equals marginal cost.
B) marginal revenue equals marginal cost.
C) average total cost equals price.
D) marginal revenue equals price.
E) average total cost is minimized.
Correct Answer:
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