Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?
A)MR MC
B)P = MC
C)P ATC
D)MR = MC

Question

Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?
A)MR > MC
B)P = MC
C)P > ATC
D)MR = MC

Quizplus · Accepted Answer

In short-run equilibrium, a monopolistically competitive firm, like firms in other market structures, will produce at the level where marginal revenue (MR) equals marginal cost (MC). This is the profit-maximizing condition for firms in many market structures, including perfect competition, monopoly, and monopolistic competition.

Which of the Following Conditions Is Characteristic of a Monopolistically