Refer to Figure 26.2 for a monopolistically competitive firm.At the profit-maximizing output and price, this firm is producing at an output level that achieves

Question

Quizplus · Accepted Answer

At the profit-maximizing output and price, a monopolistically competitive firm is producing at a level where marginal revenue equals marginal cost, which is not the level of productive or allocative efficiency. Therefore, the correct answer is D, as the firm is not achieving either productive or allocative efficiency.