A Monopolistically Competitive Firm Is Currently Producing 10 Units of Output.At

question 355

Multiple Choice

A monopolistically competitive firm is currently producing 10 units of output.At this level of output the firm is charging a price equal to $10,has marginal revenue equal to $6,has marginal cost equal to $6,and has average total cost equal to $12.From this information we can infer that

• A) the firm is currently maximizing its profit.
• B) the profits of the firm are negative.
• C) firms are likely to leave this market in the long run.
• D) All of the above are correct.

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