If a firm operating in monopolistic competition is producing a quantity that generates MC > MR,then the marginal decision rule tells us that profit:

A) can be increased by increasing production.
B) can be increased by decreasing production.
C) can be increased by decreasing the price.
D) is maximized only if MC = P.

Marginal Decision Rule

A principle that states that an action should be taken if, and only if, the marginal benefits exceed the marginal costs.

MC > MR

A condition where a firm's marginal cost is greater than its marginal revenue, suggesting that it would not be profitable to increase output further.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, leading to competition based on price, quality, and marketing.