Exhibit 9-1 A monopolistic competitive firm As presented in Exhibit 9-1, the short-run profit-maximizing output for the monopolistic competitive firm is:

Question

Exhibit 9-1  A monopolistic competitive firm  As presented in Exhibit 9-1, the short-run profit-maximizing output for the monopolistic competitive firm is:

Quizplus · Accepted Answer

In the short-run, monopolistically competitive firms maximize profits by producing at the point where marginal revenue (MR) equals marginal cost (MC) and charging a price based on the demand curve for that level of output. In the graph, at the quantity of 400 units, MR intersects MC and the demand curve at a point where the price is greater than the average total cost (ATC). This means the firm is earning positive economic profits. Therefore, the profit-maximizing output for the firm is 400 units per day.

Exhibit 9-1 a Monopolistic Competitive Firm as Presented in Exhibit