Both Monopolistically Competitive Firms and Perfectly Competitive Firms Maximise Profits

question 216

Multiple Choice

Both monopolistically competitive firms and perfectly competitive firms maximise profits

• A) by producing where price equals average total cost.
• B) by producing where marginal revenue equals average revenue.
• C) by producing where marginal revenue is equal to marginal cost.
• D) by producing where price equals average variable cost.

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Definitions:

Gallon

A unit of volume for liquid measure equal to four quarts, used in the United States and the United Kingdom.

Equilibrium Quantity

The quantity of goods or services supplied is equal to the quantity demanded at the market price.

Socially Optimal

A state or outcome that maximizes the overall welfare or benefit to society, often considered in economics and game theory to balance individual and collective interests.

Gasoline

A volatile, flammable liquid derived from petroleum, used primarily as fuel in spark-ignited internal combustion engines.