Graph 17-2
-Refer to Graph 17-2.Which of the graphs shown would be consistent with a firm in a monopolistically competitive market that is minimising its losses?

Question

Graph 17-2 
-Refer to Graph 17-2.Which of the graphs shown would be consistent with a firm in a monopolistically competitive market that is minimising its losses?

Quizplus · Accepted Answer

In a monopolistically competitive market, a firm minimizes its losses when it produces where marginal cost equals marginal revenue, even if it results in a loss. Panel b likely shows a situation where the firm is covering its variable costs but not its total costs, indicating loss minimization.

Graph 17-2 -Refer to Graph 17-2.Which of the Graphs Shown Would Be