How Do Both Monopolistically Competitive Firms and Perfectly Competitive Firms
How do both monopolistically competitive firms and perfectly competitive firms maximise profit?
A) By producing where price equals average total cost
B) By producing where marginal revenue equals average revenue
C) By producing where marginal revenue is equal to marginal cost
D) By producing where price equals average variable cost
A monopolistically competitive firm maximises profit in the short run by producing where _____.
A) price is less than marginal cost
B) price is less than marginal revenue
C) price is less than average revenue
D) price is greater than marginal cost
A monopolistically competitive firm chooses _______.
A) both the quantity of output to produce and the price at which it will sell its output
B) the price of the product it sells, but market forces determine the quantity it will be able to sell
C) the quantity of output to produce, but the price of the product it sells is determined collectively by all firms in the industry
D) the price of the product it sells, but the quantity of output to produce is agreed upon by all firms in the industry
Refer to Figure 9.6.Suppose Dell finds the relationship between the average total cost of producing notebook computers and the quantity of notebook computers produced as shown in Figure 9.6.Dell will maximise profits if it produces ________ notebook computers per month.
A) 100 000
B) 200 000
C) 300 000
D) Not enough information is given to determine the profit-maximising quantity.