If a monopolistically competitive firm is producing where MR = MC and price is greater than ATC, the firm is earning a profit.

Question

Quizplus · Accepted Answer

In this scenario, since price is greater than average total cost (ATC) and the firm is producing where marginal revenue (MR) equals marginal cost (MC), it indicates that the firm is covering all its costs and earning an additional amount on each unit sold, thus making a profit.

If a Monopolistically Competitive Firm Is Producing Where MR =