Use the figure below to answer the following questions.

Figure 14.2.3
-Refer to Figure 14.2.3. Assume this firm faces demand curve D₁.To maximize economic profit, this firm in monopolistic competition will charge a price of ________ and produce an output of ________ units.

Question

Use the figure below to answer the following questions.
  
Figure 14.2.3
-Refer to Figure 14.2.3. Assume this firm faces demand curve D₁.To maximize economic profit, this firm in monopolistic competition will charge a price of ________ and produce an output of ________ units.

Quizplus · Accepted Answer

In monopolistic competition, a firm maximizes profit where marginal cost (MC) equals marginal revenue (MR). Given the demand curve D₁, the firm will set the price at the highest point on the demand curve that corresponds to this output level. The correct choice is $100 for 200 units, as it aligns with the profit-maximizing condition.

Use the Figure Below to Answer the Following Questions