What is the profit-maximising rule for a monopolistically competitive firm?

Question

Quizplus · Accepted Answer

A monopolistically competitive firm will maximize its profit by producing at the quantity where marginal revenue equals marginal cost. This is because in the short run, a firm can earn economic profits by setting a price above its average total cost, and producing at the quantity where marginal revenue equals marginal cost allows the firm to produce up to the quantity where this is the case. Producing beyond this quantity would result in marginal cost being greater than marginal revenue, leading to lower profits.

What Is the Profit-Maximising Rule for a Monopolistically Competitive Firm