Answer the question based on the demand and cost schedules for a monopolistically competitive firm given in the table below. $\begin{array} { | c | c | c | c | }
\hline \text { Price } & \begin{array} { c }
\text { Quntity } \
\text { Dennded }
\end{array} & \begin{array} { c }
\text { Total } \
\text { Cost }
\end{array} & \text { Output } \
\hline \$ 20 & 1 & \$ 10 & 1 \
\hline 18 & 2 & 20 & 2 \
\hline 16 & 3 & 29 & 3 \
\hline 14 & 4 & 36 & 4 \
\hline 12 & 5 & 40 & 5 \
\hline 10 & 6 & 42 & 6 \
\hline
\end{array}$ What output quantity will the monopolistically competitive firm produce to maximize profits?
A) 2
B) 3
C) 5
D) 6

Question

Answer the question based on the demand and cost schedules for a monopolistically competitive firm given in the table below. $\begin{array} { | c | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quntity } \
\text { Dennded }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Cost }
\end{array} & \text { Output } \
\hline \$ 20 & 1 & \$ 10 & 1 \
\hline 18 & 2 & 20 & 2 \
\hline 16 & 3 & 29 & 3 \
\hline 14 & 4 & 36 & 4 \
\hline 12 & 5 & 40 & 5 \
\hline 10 & 6 & 42 & 6 \
\hline
\end{array}$ What output quantity will the monopolistically competitive firm produce to maximize profits?
A) 2
B) 3
C) 5
D) 6

Quizplus · Accepted Answer

The monopolistically competitive firm will produce an output quantity of 5 to maximize profits. This is because at an output quantity of 5, the firm's marginal revenue is equal to its marginal cost.

Answer the Question Based on the Demand and Cost Schedules