How would a monopolistically competitive firm determine its profit maximizing level of output and price? Group of answer choices 1-The firm would use industry averages to determine the profit maximizing level of output and price. 2-A monopolistically competitive firm could set any output and price level to yield maximum profit because it controls all of the resources. 3-The firm would determine output based on the intersection of marginal cost and marginal revenue, then examine where that output level intersects with the demand curve to determine the price. 4-The firm would determine output based on the intersection of average cost and marginal cost, then examine where that output level intersects with the supply curve to determine the price.
How would a monopolistically competitive firm determine its profit maximizing level of output and price? Group of answer choices 1-The firm would use industry averages to determine the profit maximizing level of output and price. 2-A monopolistically competitive firm could set any output and price level to yield maximum profit because it controls all of the resources. 3-The firm would determine output based on the intersection of marginal cost and marginal revenue, then examine where that output level intersects with the demand curve to determine the price. 4-The firm would determine output based on the intersection of average cost and marginal cost, then examine where that output level intersects with the supply curve to determine the price.
Chapter9: Monopolistic Competition And Oligoply
Section: Chapter Questions
Problem 5SQ
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How would a monopolistically competitive firm determine its profit maximizing level of output and price?
Group of answer choices
1-The firm would use industry averages to determine the profit maximizing level of output and price.
2-A monopolistically competitive firm could set any output and price level to yield maximum profit because it controls all of the resources.
3-The firm would determine output based on the intersection of marginal cost and marginal revenue, then examine where that output level intersects with the demand curve to determine the price.
4-The firm would determine output based on the intersection of average cost and marginal cost, then examine where that output level intersects with the supply curve to determine the price.
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