Multiple Choice
Assume a monopolistically competitive firm faces the following situation: P = $20; output = 13,000 units; MC = $16; ATC = $22; AVC = $15; and MR = $16. Which statement BEST describes the firm's situation?
A) The firm is minimizing its losses.
B) The firm is earning a normal profit, indicating that the market is likely in a long-run equilibrium.
C) The firm would minimize its losses by increasing its output.
D) The firm would maximize its profit by decreasing its output.
Correct Answer:
Verified
Correct Answer:
Verified
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