Use the following to answer questions:
Figure: Monopolistic Competitor
-(Figure: Monopolistic Competitor) If the firm shown in the figure Monopolistic Competitor produces at its profit-maximizing level, it will produce:
A) with excess capacity, since its P is greater than MC.
B) without excess capacity, since P is greater than ATC.
C) with excess capacity, since that output level is on the downward-sloping portion of the ATC curve.
D) without excess capacity, since that output level is on the downward-sloping portion of the MR curve.

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Use the following to answer questions:
Figure: Monopolistic Competitor 
-(Figure: Monopolistic Competitor) If the firm shown in the figure Monopolistic Competitor produces at its profit-maximizing level, it will produce:
A) with excess capacity, since its P is greater than MC. 
B) without excess capacity, since P is greater than ATC. 
C) with excess capacity, since that output level is on the downward-sloping portion of the ATC curve. 
D) without excess capacity, since that output level is on the downward-sloping portion of the MR curve.

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The Answer of Use the following to answer questions:
Figure: Monopolistic Competitor 
-(Figure: Monopolistic Competitor) If the firm shown in the figure Monopolistic Competitor produces at its profit-maximizing level, it will produce:
A) with excess capacity, since its P is greater than MC. 
B) without excess capacity, since P is greater than ATC. 
C) with excess capacity, since that output level is on the downward-sloping portion of the ATC curve. 
D) without excess capacity, since that output level is on the downward-sloping portion of the MR curve.

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