Exhibit 9-2 A monopolistic competitive firm
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Comparing the monopolistically competitive firm in Exhibit 9-2 to the long-run profit-maximizing outcome for a perfectly competitive firm with a price of $15 per unit and a quantity of 600,
A. the quantity produced by the monopolistically competitive firm is higher than that of the perfectly competitive firm.
B. the profit earned by the monopolistically competitive firm is higher than that of the perfectly competitive firm.
C. the marginal revenue of the monopolistically competitive firm is lower than that of the perfectly competitive firm at the profit-maximizing quantity.
D. the long run average cost of the monopolistically competitive firm is higher than that of the perfectly competitive firm at the profit-maximizing quantity.
Answer: C
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