A firm in a monopolistically competitive market determines the profit-maximizing output at which

Question

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In a monopolistically competitive market, the profit-maximizing output occurs where the marginal revenue (MR) equals the marginal cost (MC). This is because MR represents the additional revenue generated by producing one more unit, while MC represents the additional cost incurred by producing one more unit. Therefore, producing more units will increase revenue as long as the additional revenue received from selling the unit is greater than the additional cost incurred to produce it. Only option D satisfies this condition.

A Firm in a Monopolistically Competitive Market Determines the Profit-Maximizing