The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2

-A monopolistically competitive firm maximizes profit at the point at which price is equal to marginal cost.

Question

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2
 
-A monopolistically competitive firm maximizes profit at the point at which price is equal to marginal cost.

Quizplus · Accepted Answer

A monopolistically competitive firm maximizes profit at the point at which marginal revenue equals marginal cost, not price equals marginal cost.

The Table Below Shows the Payoff (Profit) Matrix of Firm