Which of the following statements about a monopolistically competitive firm is T

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

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