A monopolistically competitive firm will produce output as long as the marginal revenue is
A) less than price.
B) less than marginal costs.
C) above price.
D) above marginal costs.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, firms will continue to produce output as long as the marginal revenue (MR) is above the marginal costs (MC). This is because producing additional units is profitable as long as the revenue from selling those units exceeds the cost of producing them.

A Monopolistically Competitive Firm Will Produce Output as Long as the Marginal