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Figure: Profit Maximization in Monopolistic Competition
-(Figure: Profit Maximization in Monopolistic Competition) In panel (A) of the figure Profit Maximization in Monopolistic Competition, the profit-maximizing price and quantity are _____ and _____.
A) S; M
B) P; M
C) P; Q
D) T; Q

Question

Use the following to answer questions:
Figure: Profit Maximization in Monopolistic Competition 
-(Figure: Profit Maximization in Monopolistic Competition) In panel (A) of the figure Profit Maximization in Monopolistic Competition, the profit-maximizing price and quantity are _____ and _____.
A) S; M 
B) P; M 
C) P; Q 
D) T; Q

Quizplus · Accepted Answer

In monopolistic competition, the profit-maximizing quantity is where marginal cost (MC) equals marginal revenue (MR), and the price is determined by the demand curve at that quantity.

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