Figure 9-9
-Refer to Figure 9-9.Which of the graphs in the figure depicts a monopolistically competitive firm that is minimising its losses?

Question

Figure 9-9 
-Refer to Figure 9-9.Which of the graphs in the figure depicts a monopolistically competitive firm that is minimising its losses?

Quizplus · Accepted Answer

Panel C shows a monopolistically competitive firm that is minimising its losses by producing the quantity at which marginal cost equals marginal revenue, which is below the average total cost curve. The firm is still making a loss, but it is the smallest possible loss in the short run. Panels A and B show a monopolistically competitive firm making profits and losses that are not minimised.

Figure 9-9 -Refer to Figure 9-9.Which of the Graphs in the Figure