As in all other market structures, firms in monopolistic competition maximize profit by equating marginal cost to price.

Question

Quizplus · Accepted Answer

In monopolistic competition, firms do not equate marginal cost to price as they have some degree of market power and can set prices above marginal cost. Instead, they use a combination of pricing strategies such as price discrimination, advertising, and product differentiation to maximize profit.

As in All Other Market Structures, Firms in Monopolistic Competition