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To maximize its profit, a monopolistically competitive firm chooses its level of output by looking for the level of output at which A. average total cost is minimized. B. marginal revenue equals marginal cost. C. price equals marginal cost. D. All of the above are correct.

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eooyibo123

Answer:

B. marginal revenue equals marginal cost.

Explanation:

Monopolistic competition involves a market where many firms provide products that are similar but not exactly the same to the consumer. In this market the firm's needs to effectively promote their product to highlight difference from other products.

When a firm in monopolistic competition wants to maximise profit it targets the quantity at which marginal revenue is equal to marginal cost.

At this point any extra increase in revenue will result in a profit for the firm.

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