A monopolistic competitive firm maximizes profits by producing at the point where
A)total revenue is at a maximum.
B)marginal revenue equals average cost.
C)marginal revenue equals marginal cost.
D)price equals marginal revenue.
E)b and d

Question

Quizplus · Accepted Answer

A monopolistic competitive firm, like firms in other market structures, maximizes profits by producing at the level where marginal revenue (MR) equals marginal cost (MC). This is the profit-maximizing condition for all firms regardless of the market structure.

A Monopolistic Competitive Firm Maximizes Profits by Producing at the Point