The profit-maximizing rule MC = MR is followed by firms under:
A) monopolistic competition, but not perfect competition.
B) perfect competition, but not monopolistic competition.
C) either monopolistic competition or perfect competition, depending on the costs of production.
D) both monopolistic competition and perfect competition.

Question

Quizplus · Accepted Answer

The profit-maximizing rule MC = MR is followed by firms under both monopolistic competition and perfect competition. In both market structures, firms aim to produce where marginal cost equals marginal revenue in order to maximize profit.

The Profit-Maximizing Rule MC = MR Is Followed by Firms