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Figure: Profit Maximization in Monopolistic Competition
-(Figure: Profit Maximization in Monopolistic Competition) Look at the figure Profit Maximization in Monopolistic Competition. When the demand curve for a firm in monopolistic competition shifts, the marginal revenue curve:
A) must also shift.
B) shifts in the opposite direction.
C) will stay the same.
D) will shift, but the profit-maximizing quantity will not change.

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Use the following to answer questions:
Figure: Profit Maximization in Monopolistic Competition 
-(Figure: Profit Maximization in Monopolistic Competition) Look at the figure Profit Maximization in Monopolistic Competition. When the demand curve for a firm in monopolistic competition shifts, the marginal revenue curve:
A) must also shift. 
B) shifts in the opposite direction. 
C) will stay the same. 
D) will shift, but the profit-maximizing quantity will not change.

Quizplus · Accepted Answer

The marginal revenue curve is derived from the demand curve, so when the demand curve shifts, the marginal revenue curve must also shift in the same direction.

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