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In Monopolistic Competition,a Firm Produces 10,000 Units When Its Marginal

Question 8

Multiple Choice

In monopolistic competition,a firm produces 10,000 units when its marginal revenue equals its marginal cost. At this level of output, the firms average variable cost is $4.30 and its average fixed cost is $2.10. If the firm sells the product for $5 each, at best it is earning


A) a profit of $14,000.
B) losses of $14,000.
C) a profit of $7,000.
D) losses of $7,000.
E) There is not enough information provided to answer this question.

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