Figure 16-7 -Refer to Figure 16-7. If a firm in a monopolistically competitive market was producing the level of output depicted as Q_d in panel (d), it would A)not be maximizing its profit. B)be minimizing its losses. C)be losing market share to other firms in the market. D)be operating at excess capacity.

Question

Quizplus · Accepted Answer

At output level Qd, the firm is not maximizing its profit because it is not producing where marginal cost equals marginal revenue, which is the profit-maximizing condition for firms in monopolistic competition.

Figure 16-7 -Refer to Figure 16-7. If a Firm in a Monopolistically