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QUESTION 16 Figure 16-9 The figure is drawn for a monopolistically competitive firm. ATC Demand 56.67...



QUESTION 16 Figure 16-9 The figure is drawn for a monopolistically competitive firm. ATC Demand 56.67 Quantity Refer to Figur
QUESTION 16 Figure 16-9 The figure is drawn for a monopolistically competitive firm. ATC Demand 56.67 Quantity Refer to Figure 16-9. In order to maximize its profit, the firm will choose to produce a. 133.33 units of output, and its profit will be zero. b. 100 units of output, and its profit will be positive. c. 100 units of output, and its profit will be zero. d. 133.33 units of output, and its profit will be negative.
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At the profit-maximizing point, the marginal cost is equal to that of marginal revenue and in this case the output is 100 units, and this point when it is extended to the demand curve the price is in such a way that is equal to that of average total cost and therefore it is earning zero profit

Therefore (c) is the answer to this question

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