Narrbegin Exhibit 9.1 A monopolistic competitive firm
-As presented in Exhibit 9.1, the short-run, profit-maximising output for the monopolistic competitive firm is:

Question

Narrbegin Exhibit 9.1 A monopolistic competitive firm  
-As presented in Exhibit 9.1, the short-run, profit-maximising output for the monopolistic competitive firm is:

Quizplus · Accepted Answer

In monopolistic competition, firms produce where marginal revenue equals marginal cost, and charge a price higher than the marginal cost. In the short run, the firm will produce as long as price exceeds average variable cost. In Exhibit 9.1, the price at the profit-maximizing output is $16, and the corresponding quantity is 400 units. Therefore, the answer is C) 400 units per day.