To Maximize Profit,a Monopolistically Competitive Firm Should Produce the Level

question 147

Multiple Choice

To maximize profit,a monopolistically competitive firm should produce the level of output at which:

• A)marginal revenue equals marginal cost.
• B)price equals marginal cost.
• C)price equals total cost.
• D)marginal revenue equals price.

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Definitions:

Output

The total amount of goods or services produced by a company, sector, or economy within a specific time period.

Isoquants

Curves that represent all the combinations of two inputs that produce the same level of output, used in the analysis of production technology.

Production Function

A mathematical representation of the relationship between input factors of production and the output of goods or services.

Marginal Product

The additional output that is produced as a result of using one more unit of a particular input, while keeping other inputs constant.