Exhibit 24-8

-Refer to Exhibit 24-8. A profit-maximizing monopolistic competitive firm that produces the level of output where MR = MC will produce ______________ units of output and charge a price of ______________.
A)3; $260
B)4; $232.50
C)5; $210
D)6; $191.67
E)7; $175.71

Question

Exhibit 24-8
 
-Refer to Exhibit 24-8. A profit-maximizing monopolistic competitive firm that produces the level of output where MR = MC will produce ______________ units of output and charge a price of ______________.
A)3; $260 
B)4; $232.50 
C)5; $210 
D)6; $191.67 
E)7; $175.71

Quizplus · Accepted Answer

A profit-maximizing firm in monopolistic competition produces where marginal revenue (MR) equals marginal cost (MC). The choice that corresponds to this condition is C, with 5 units of output. The price charged is determined by the demand curve at this quantity, which is $210.

Exhibit 24-8 -Refer to Exhibit 24-8. a Profit-Maximizing Monopolistic Competitive Firm That