A Monopolistically Competitive Firm Is Currently Producing 20 Units of Output

question 334

Multiple Choice

A monopolistically competitive firm is currently producing 20 units of output. At this level of output the firm is charging a price equal to $20, has marginal revenue equal to $12, has marginal cost equal to $12, and has average total cost equal to $18. 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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