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Author Question: How does a firm in monopolistic competition decide how much to produce and at what price to offer ... (Read 51 times)

ereecah

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on: Jun 29, 2018
How does a firm in monopolistic competition decide how much to produce and at what price to offer its product for sale?
 
  What will be an ideal response?

Question 2

The price elasticity of supply is calculated as the change in supply divided by the change in price.
 
  Indicate whether the statement is true or false
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medine

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A firm that has already decided the quality of its product and its marketing program produces the output at which its marginal revenue equals its marginal cost (MR = MC) because this output maximizes profit. The price is determined from the demand curve for the firm's product and is the highest price the firm can charge for the profit-maximizing quantity.

Answer to Question 2

FALSE


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