A monopolistically competitive firm faces the following demand schedule for its product: $$\begin{array} { | l | c | c | c | c | c | c | c | c | c | c | }
\hline \text { Price (dinars) } & 10 & 9 & 8 & 7 & 6 & 5 & 4 & 3 & 2 & 1 \
\hline \text { Quantity } & 2 & 4 & 6 & 9 & 11 & 13 & 15 & 17 & 19 & 21 \
\hline
\end{array}$$ The firm has total fixed costs of $20 and a constant marginal cost of $2 per unit.The firm will maximize profit with

Question

A monopolistically competitive firm faces the following demand schedule for its product: $$\begin{array} { | l | c | c | c | c | c | c | c | c | c | c | } 
\hline \text { Price (dinars) } & 10 & 9 & 8 & 7 & 6 & 5 & 4 & 3 & 2 & 1 \
\hline \text { Quantity } & 2 & 4 & 6 & 9 & 11 & 13 & 15 & 17 & 19 & 21 \
\hline
\end{array}$$ The firm has total fixed costs of $20 and a constant marginal cost of $2 per unit.The firm will maximize profit with

Quizplus · Accepted Answer

To maximize profit, the firm should produce where marginal cost equals marginal revenue. Calculating marginal revenue for each quantity and comparing it to the constant marginal cost of $2, the firm maximizes profit at 9 units of output.

A Monopolistically Competitive Firm Faces the Following Demand Schedule for Its