In the short run,a monopolistic competitor

Question

Quizplus · Accepted Answer

In the short run, a monopolistic competitor maximizes profits by producing where marginal revenue (MR) equals marginal cost (MC). Therefore, the correct answer is D: sets MR = MC. 
Option A is incorrect because a monopolistic competitor can operate at a level below or above minimum efficient scale (MES) in the short run. 
Option B is incorrect because, unlike perfect competition, the price in a monopolistic competition situation is greater than the average cost (AC) but less than the average revenue (AR). 
Option C is also incorrect because, unlike perfect competition, monopolistic competition firms charge a price that is greater than the marginal cost (MC).

In the Short Run,a Monopolistic Competitor