The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Which of the following theories applies to strategic behavior?
A)Field Theory
B)Game Theory
C)Theory of Consumers' Behavior
D)Social Contract Theory
E)Rational Choice Theory

Question

The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
  MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Which of the following theories applies to strategic behavior?
A)Field Theory 
B)Game Theory 
C)Theory of Consumers' Behavior 
D)Social Contract Theory 
E)Rational Choice Theory

Quizplus · Accepted Answer

Game theory applies to strategic behavior, which involves the analysis of decision-making among individuals and firms who are often motivated by their own self-interest and engaged in a competitive environment. In this case, the monopolistically competitive firm must make strategic decisions about pricing and output in order to maximize profits while also taking into account the potential reactions and responses of its competitors.

The Figure Given Below Shows the Revenue and Cost Curves