Table 16-5
This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm.
-Refer to Table 16-5. How much profit will this firm earn at the monopolistically competitive price?
A)$0
B)$5
C)$12
D)$16

Question

Table 16-5
This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. 
-Refer to Table 16-5. How much profit will this firm earn at the monopolistically competitive price?
A)$0 
B)$5 
C)$12 
D)$16

Quizplus · Accepted Answer

The firm will earn zero profit at the monopolistically competitive price because the price (P = $30) is equal to the average total cost (ATC = $30). At this price, the firm is breaking even and earning zero economic profit.

Table 16-5 This Table Shows the Demand Schedule, Marginal Cost, and Average