A monopolistically competitive firm is operating at a short-run level of output where price is $30, average total cost is $27, marginal cost is $20, and marginal revenue is $25. In the short run this firm should

Question

Quizplus · Accepted Answer

Since marginal revenue ($25) is greater than marginal cost ($20), the firm should increase the level of output to maximize profit.

A Monopolistically Competitive Firm Is Operating at a Short-Run Level