To maximize profits, a firm in monopolistic competition will likely produce so that marginal cost:
A) equals average total cost.
B) is greater than marginal revenue.
C) equals marginal revenue.
D) equals price.

Question

Quizplus · Accepted Answer

In monopolistic competition, a firm maximizes profit by producing where marginal cost equals marginal revenue, as this is the point where the cost of producing an additional unit is exactly covered by the revenue it generates.

To Maximize Profits, a Firm in Monopolistic Competition Will Likely