Assume a Monopolistically Competitive Firm Is Earning an Economic Profit

question 155

Multiple Choice

Assume a monopolistically competitive firm is earning an economic profit.The marginal revenue from selling an additional unit is $30 and the marginal cost of producing that additional unit is $23.The firm should

• A)change neither its price nor its output level
• B)reduce its price and increase its output level
• C)increase its price and reduce its output level
• D)reduce both its price and its output level
• E)increase both its price and its output level

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Definitions:

Organizations

Entities comprising individuals working together to achieve shared goals or objectives.

Functional Design

An approach in design that emphasizes developing products, systems, or structures with their intended purpose or function as the primary consideration.

Geographic Design

The strategic arrangement of physical locations, facilities, and infrastructure to optimize an organization’s operations across different geographic areas.

Product Design

The process of conceptualizing and creating a new product to be sold by a business to its customers, focusing on functionality, appearance, and user experience.