Which of the following is true regarding the product... - Solved MCQs & Answer

3345EconomicsMedium

Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals?

Aaverage total cost and then use the supply curve to determine the price consistent with this quantity

Bmarginal revenue and then use the supply curve to determine the price consistent with this quantity

Caverage total cost and then use the demand curve to determine the price consistent with this quantity

Dmarginal revenue and then use the demand curve to determine the price consistent with this quantity

Correct answer

D. marginal revenue and then use the demand curve to determine the price consistent with this quantity

Explanation

The correct answer is marginal revenue and then use the demand curve to determine the price consistent with this quantity.

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