Figure: Monopolistic Competitor (Figure: Monopolistic Competitor) If the Firm Shown in the Figure

Multiple Choice

Figure: Monopolistic Competitor
(Figure: Monopolistic Competitor) If the firm shown in the figure Monopolistic Competitor produces at its profit-maximizing level, it will produce:

A) with excess capacity, since its P is greater than MC.
B) without excess capacity, since P is greater than ATC.
C) with excess capacity, since that output level is on the downward-sloping portion of the ATC curve.
D) without excess capacity, since that output level is on the downward-sloping portion of the MR curve.