Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions:
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.