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    Microeconomics Study Set 2
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    Exam 13: Monopolistic Competition: the Competitive Model in a
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    Assume That Price Exceeds Average Variable Cost Over the Relevant
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Assume That Price Exceeds Average Variable Cost Over the Relevant

Question 222

Question 222

True/False

Assume that price exceeds average variable cost over the relevant range of demand.If a monopolistically competitive firm is producing at an output where marginal revenue is $111.11 and marginal cost is $118, then to maximize profits the firm should increase its output.

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