The Figure Given Below Shows the Cost and Revenue Curves

Multiple Choice

The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-In a certain monopolistically competitive market that is characterized by high prices and equally high-quality merchandise, if a firm's competitors begin to successfully introduce new products that cut into the firm's market share, the firm's best counter-strategy is to:

A) raise prices in order to increase the revenue.
B) introduce few new products in order to meet competitors head on.
C) reduce its advertising budget in order to save costs.
D) ignore its competitors and hope its customers' loyalty carry it through the threat.
E) look to the government for protection.