Costume jewelry is produced in a monopolistically competitive market. One producer finds that MR = MC = $3 when output is 700 necklaces. An economist studying this information can conclude that:
A) the producer is charging a price of $3.
B) economic profit is $2,100.
C) the producer charges a price greater than $3.
D) new firms will want to enter.
E) this producer should produce more than 700 necklaces.
Correct Answer:
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