Asked by Rabina Pandey on Jul 04, 2024
Verified
A monopolistically competitive firm maximizes profit by producing where marginal revenue equals marginal cost.
Maximizes Profit
The strategy or process implemented to increase the difference between total revenue and total costs to the highest possible amount.
Marginal Revenue
Income gained by selling an additional unit of a product or service.
Marginal Cost
The increased expenditure incurred from producing one more unit of a product or service.
- Grasp the concept of profit maximization for monopolistically competitive firms.
Verified Answer
MS
Maksym ShevchenkoJul 06, 2024
Final Answer :
True
Explanation :
In monopolistic competition, just like in perfect competition and monopoly markets, firms maximize profit by producing at the level where marginal revenue (MR) equals marginal cost (MC). This is the profit-maximizing condition in standard economic theory.
Learning Objectives
- Grasp the concept of profit maximization for monopolistically competitive firms.
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