In setting the price of its product,a monopolistic competitor sets the price equal to its marginal cost plus an amount called the
A)markup.
B)profit.
C)rent.
D)menu cost.

Question

Quizplus · Accepted Answer

A monopolistic competitor sets the price above marginal cost to earn a profit, and the amount added to marginal cost is known as the markup. This is a common pricing strategy for firms in markets with some degree of competition but not perfect competition. Therefore, the correct answer is A) markup.

In Setting the Price of Its Product,a Monopolistic Competitor Sets