An monopolistic competition producer will produce at an optimal level of output that will maximize profits...
An monopolistic competition producer will produce at an optimal level of output that will maximize profits in the short-run when:
|
a. |
MC = AC |
|
b. |
MC > AC |
|
c. |
MR = MC |
|
d. |
MC = AFC |
|
e. |
none of the above |
Homework Answers
An monopolistic competition producer will produce at an optimal level of output that will maximize profits in the short-run when:
Ans. c) MR = MC
Just like a monopoly, a monopolistic competitive firm will maximize its profits when it produces goods to the point where marginal cost is equal to marginal revenue.
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