If a Monopolistic Competitor Is Producing an Output for Which

question 145

Multiple Choice

If a monopolistic competitor is producing an output for which marginal revenue is $40 and marginal cost is $32 to maximize profits the firm should

• A)decrease the level of output.
• B)keep the level of output constant.
• C)continue to make $8 per unit.
• D)increase the level of output.

---

Definitions:

Governmental Powers

Governmental Powers refer to the authorities and powers granted to government bodies to create, enforce, and interpret laws governing the society they serve.

Publicly Held Corporation

A corporation whose shares are publicly traded on stock exchanges, allowing for ownership by public investors.

For-Profit Corporation

A business entity aimed at generating profit for its shareholders.

Stock

A type of security that signifies ownership in a corporation, representing a claim on part of the corporation's assets and profits.