Once a firm in monopolistic competition has determined how much to produce,the firm determines its price by referring to its
A) demand curve.
B) marginal cost curve.
C) marginal revenue curve.
D) average total cost curve.
E) average variable cost curve.

Question

Quizplus · Accepted Answer

The firm in monopolistic competition determines its price by referring to its demand curve, as the demand curve reflects the highest price consumers are willing to pay for each quantity of the product. This allows the firm to set a price for the quantity it has decided to produce.

Once a Firm in Monopolistic Competition Has Determined How Much