In order to maximize profits, a firm in monopolistic competition will likely produce:
A)at the output level at which marginal cost equals average total cost.
B)at the output level at which marginal cost is greater than marginal revenue.
C)at the output level at which marginal cost equals marginal revenue.
D)at the output level at which marginal cost equals price.

Question

Quizplus · Accepted Answer

In monopolistic competition, like in other market structures, a firm maximizes profit by producing at the output level where marginal cost (MC) equals marginal revenue (MR).

In Order to Maximize Profits, a Firm in Monopolistic Competition