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Figure: Monopolistic Competition III
-(Figure: Monopolistic Competition III) The figure Monopolistic Competition III shows the demand, marginal revenue, marginal cost, and average total cost curves for Pat's Pizza Parlor, a monopolistic competitor in the food-to-go industry. Pat's Pizza Parlor's maximal profit will be:
A) $0.
B) $350.
C) $700.
D) $900.

Question

Use the following to answer questions:
Figure: Monopolistic Competition III 
-(Figure: Monopolistic Competition III) The figure Monopolistic Competition III shows the demand, marginal revenue, marginal cost, and average total cost curves for Pat's Pizza Parlor, a monopolistic competitor in the food-to-go industry. Pat's Pizza Parlor's maximal profit will be:
A) $0. 
B) $350. 
C) $700. 
D) $900.

Quizplus · Accepted Answer

In monopolistic competition, the maximal profit is determined where marginal cost (MC) equals marginal revenue (MR). The profit is calculated as the difference between total revenue and total cost at this output level. The figure likely shows that at this point, the profit is $350.

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