A monopolistically competitive firm is currently producing 10 units of output.At this level of output the firm is charging a price equal to $10,has marginal revenue equal to $6,has marginal cost equal to $6,and has average total cost equal to $12.From this information we can infer that

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The firm is maximizing profit as MR=MC. Profits are negative since price ($10) is less than average total cost ($12). Firms are likely to leave the market in the long run due to negative profits.

A Monopolistically Competitive Firm Is Currently Producing 10 Units of Output.At