The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Consider the monopolistically competitive firm described in Figure 12.4. The profit-maximizing output level and price are _____ and _____, respectively.
A)F; A
B)F; E
C)J; B
D)L; D
E)N; P

Question

The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
  MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Consider the monopolistically competitive firm described in Figure 12.4. The profit-maximizing output level and price are _____ and _____, respectively.
A)F; A 
B)F; E 
C)J; B 
D)L; D 
E)N; P

Quizplus · Accepted Answer

The profit-maximizing output level is F, where marginal cost (MC) equals marginal revenue (MR). The profit-maximizing price is E, which is the price that consumers are willing to pay for the output level F.

The Figure Given Below Shows the Revenue and Cost Curves