Figure 13-11
-Refer to Figure 13-11.What is the monopolistic competitor's profit maximizing output?
A)Q1 units
B)Q2 units
C)Q3 units
D)Q4 units

Question

Figure 13-11 
-Refer to Figure 13-11.What is the monopolistic competitor's profit maximizing output?
A)Q1 units 
B)Q2 units 
C)Q3 units 
D)Q4 units

Quizplus · Accepted Answer

The monopolistic competitor's profit maximizing output occurs where marginal revenue (MR) equals marginal cost (MC). This occurs at point Q2, which is where the MR and MC curves intersect. At this point, the firm produces Q2 units and sets P2 as the price, earning maximum profit.

Figure 13-11 -Refer to Figure 13-11.What Is the Monopolistic Competitor's Profit Maximizing