The figure given below shows the revenue and cost curves of a monopolistically competitive firm. Figure 11.4
MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Consider the monopolistically competitive firm described in Figure 11.4.The profit-maximizing output level and price are,respectively:
A)F and A.
B)F and E.
C)J and B.
D)L and D.
E)N and P.

Question

The figure given below shows the revenue and cost curves of a monopolistically competitive firm. Figure 11.4  
MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Consider the monopolistically competitive firm described in Figure 11.4.The profit-maximizing output level and price are,respectively:
A)F and A. 
B)F and E. 
C)J and B. 
D)L and D. 
E)N and P.

Quizplus · Accepted Answer

The profit-maximizing output level is where MR=MC, which is at point F in the figure. The price at this output level is where the demand curve (AR) intersects with the MR curve, which is at point E. Therefore, the profit-maximizing output level and price are F and E, respectively.

The Figure Given Below Shows the Revenue and Cost Curves