The Diagram Below Shows Demand and Cost Curves for a Monopolistically

question 12

Multiple Choice

The diagram below shows demand and cost curves for a monopolistically competitive firm.
FIGURE 11-3
-Refer to Figure 11-3.In the long run,a monopolistically competitive firm will

• A)make profit by producing at Q2 and charging price P1.
• B)lose money by producing at Q1 and charging price P2.
• C)maximize profit and make positive profit by producing at Q1 and charging price P1.
• D)maximize profit but only break even by producing at Q1 and charging price P1.
• E)maximize profit by producing output level Q2,the minimum point of its LRAC curve.

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