Which of the following statements about a monopolistically competitive firm is T
ID: 1206345 • Letter: W
Question
Which of the following statements about a monopolistically competitive firm is TRUE?
A monopolistically competitive firm maximizes profits by charging a price equal to marginal cost.
A monopolistically competitive firm produces the quantity at the point at which the demand curve crosses the marginal cost curve.
A monopolistically competitive firm maximizes profits when it produces the quantity at which marginal cost equals marginal revenue.
A monopolistically competitive firm does not always equate marginal cost to marginal revenue because it uses other means to maximize profits.
A monopolistically competitive firm maximizes profits by charging a price equal to marginal cost.
A monopolistically competitive firm produces the quantity at the point at which the demand curve crosses the marginal cost curve.
A monopolistically competitive firm maximizes profits when it produces the quantity at which marginal cost equals marginal revenue.
A monopolistically competitive firm does not always equate marginal cost to marginal revenue because it uses other means to maximize profits.
Explanation / Answer
option C is correct.
monopolistic firm fix the price where the marginal cost is equals to marginal revenue. at this point the firm has lowest cost levels and it maximizes revenues