The profit-maximising rule for a firm in a monopolistically competitive market is to select the quantity at which marginal revenue is equal to marginal cost.

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In a monopolistically competitive market, firms have some control over price but face competition from similar products. Therefore, the profit-maximising rule is to produce the quantity at which marginal revenue is equal to marginal cost, just as in perfect competition. This is because producing fewer units would leave potential profits on the table, while producing additional units would increase costs more than revenue.

The Profit-Maximising Rule for a Firm in a Monopolistically Competitive