A monopolistically competitive firm can minimize its losses by producing where ________ as long as ________.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, a firm minimizes its losses or maximizes its profits by producing at the quantity where marginal revenue (MR) equals marginal cost (MC), provided that the price (P) is above average variable cost (AVC) to ensure the firm covers its variable costs.

A Monopolistically Competitive Firm Can Minimize Its Losses by Producing