A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following?
A)average revenue exceeds marginal revenue
B)marginal revenue equals marginal cost
C)price exceeds marginal cost
D)All of the above are correct.

Question

Quizplus · Accepted Answer

In a monopolistically competitive market, a profit-maximizing firm sets marginal revenue equal to marginal cost (B), price exceeds marginal cost (C), and average revenue exceeds marginal revenue (A) due to the downward-sloping demand curve.

A Profit-Maximizing Firm in a Monopolistically Competitive Market Is Characterized