Multiple Choice
At a price of $8, the marginal revenue of a monopolistically competitive firm is $5. If the marginal cost is $7 and average total cost is $4, what should the firm do to maximize profits?
A) reduce output and increase price
B) increase output and decrease price
C) reduce both output and price
D) increase both output and price
Correct Answer:
Verified
Correct Answer:
Verified
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