Asked by Latanya Haynes on May 23, 2024
Verified
Refer to Figure 15.2. If We Do Hair maximizes profits as a monopolistically competitive firm, its ________ equals $1,280.
A) total cost
B) profit
C) total revenue
D) loss
Monopolistically Competitive
A market structure characterized by many firms offering products that are similar but not identical, leading to differentiated competition.
Total Revenue
The entirety of income a company secures from its sales or service activities over a certain period.
Total Cost
The sum of all costs incurred by a firm in producing a certain level of output.
- Gauge the returns, losses, and breakeven stance for enterprises engaged in monopolistic competition.
- Explore the ideal output quantities and price settings for the utmost profitability in monopolistic competition scenarios.
Verified Answer
MM
Manthan MittalMay 29, 2024
Final Answer :
C
Explanation :
In a monopolistically competitive market, a firm maximizes profit where marginal revenue equals marginal cost. The point of profit maximization corresponds to the quantity where this condition is met, and the total revenue at this quantity is the maximum profit the firm can achieve. Given the information, if "If We Do Hair" maximizes profits with a total revenue of $1,280, it indicates that this amount is the revenue generated at the profit-maximizing quantity, not the profit, total cost, or loss itself.
Learning Objectives
- Gauge the returns, losses, and breakeven stance for enterprises engaged in monopolistic competition.
- Explore the ideal output quantities and price settings for the utmost profitability in monopolistic competition scenarios.