If a monopolistically competitive firm is producing 700 units of output and the marginal revenue from producing the 700th unit of output is $5 and the marginal cost is $5.50, which of the following is true?
A) The difference between marginal revenue and marginal cost (MR - MC) at the 1,200th unit is zero.
B) The firm should decrease production to maximize profit.
C) The firm should increase production to maximize profit.
D) The firm is maximizing profit.
Correct Answer:
Verified
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