Figure 16-14
-Refer to Figure 16-14. If this firm were operating in a perfectly competitive market, it would charge a price equal to point
A)I but in a monopolistically competitive market, the profit-maximizing price is C.
B)G but in a monopolistically competitive market, the profit-maximizing price is C.
C)C but in a monopolistically competitive market, the profit-maximizing price is G.
D)G but in a monopolistically competitive market, the profit-maximizing price is J.

Question

Figure 16-14 
-Refer to Figure 16-14. If this firm were operating in a perfectly competitive market, it would charge a price equal to point
A)I but in a monopolistically competitive market, the profit-maximizing price is C. 
B)G but in a monopolistically competitive market, the profit-maximizing price is C. 
C)C but in a monopolistically competitive market, the profit-maximizing price is G. 
D)G but in a monopolistically competitive market, the profit-maximizing price is J.

Quizplus · Accepted Answer

In a perfectly competitive market, the firm would charge a price equal to the market price, which is point G. However, in a monopolistically competitive market, the firm can charge a slightly higher price due to product differentiation. The profit-maximizing price for this firm in a monopolistically competitive market is at point C.

Figure 16-14 -Refer to Figure 16-14. If This Firm Were Operating in Were