To Maximize Profit,a Firm in Monopolistic Competition Will Produce the Quantity

question 158

Multiple Choice

To maximize profit,a firm in monopolistic competition will produce the quantity where marginal revenue

• A) is greater than marginal cost.
• B) equals zero.
• C) is less than marginal cost.
• D) equals marginal cost.
• E) equals average total cost.

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Definitions:

Variable Costs

Costs that vary directly with the level of output or business activity, such as materials and labor.

Revenues

The total income produced by a company from its activities, before any expenses are subtracted.

Long-run Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied over a period long enough for producers to adjust all of their inputs.

Short-run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a short period, holding some inputs fixed.