The monopolistically competitive firm will produce a quantity that is smaller than the output which would minimize average total cost.

Name: The monopolistically competitive firm will produce a quantity that is smaller than the output which would minimize average total cost.
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In monopolistic competition, firms produce at a level where marginal cost equals marginal revenue, which is typically less than the output level that minimizes average total cost due to excess capacity.

The Monopolistically Competitive Firm Will Produce a Quantity That Is