Exhibit 9-1 A monopolistic competitive firm

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

Quizplus · Accepted Answer

In the short run, a monopolistic competitive firm maximizes its profit by producing a level of output where marginal revenue (MR) equals marginal cost (MC). In Exhibit 9-1, the MR curve intersects the MC curve at a quantity of 400 units per day. At this level of output, the firm can charge a price higher than its marginal cost, earning a positive economic profit. Therefore, the profit-maximizing output for the monopolistic competitive firm is 400 units per day.

Exhibit 9-1 a Monopolistic Competitive Firm