Based on the information in the above graph describing a monopolistically competitive firm, which of the following is true? A The firm is productively efficient since marginal cost intersects average cost at the minimum of average cost. B с D E When maximizing profits, this firm will have economic losses but will still continue to produce. The firm will produce where marginal revenue equals marginal cost and will set its price to equal average total cost. With the firm making economic profits, it can be expected that new firms will enter this market. The firm will produce where demand is inelastic to capture all economies of scale.

Based on the information in the above graph describing a monopolistically competitive firm, which of the following is true? A The firm is productively efficient since marginal cost intersects average cost at the minimum of average cost. B с D E When maximizing profits, this firm will have economic losses but will still continue to produce. The firm will produce where marginal revenue equals marginal cost and will set its price to equal average total cost. With the firm making economic profits, it can be expected that new firms will enter this market. The firm will produce where demand is inelastic to capture all economies of scale.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter5: Buying The Necessities

Section: Chapter Questions

Problem 19AA

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Please see the attached two pictures, one for the graph, and the other for the questions.