Figure 8.3 -Figure 8.3 Shows Demands and Costs for a Monopolistically Competitive

question 197

Multiple Choice

Figure 8.3
-Figure 8.3 shows demands and costs for a monopolistically competitive firm. When the firm's demand curve shifts from D₁ to D₂ and to D₃

• A) the firm's economic profit remains the same.
• B) the firm's marginal revenue at the profit maximizing output level is decreasing.
• C) the firm's marginal cost at the profit maximizing output level is increasing.
• D) the firm's average cost at the profit maximizing output level is decreasing.

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