Give typing answer with explanation and conclusion a profit-maximizing, monopolistically competitive firm always operates: a. at an economically efficient scale. b. at the minimum of average total cost. c. at the point where demand is unit elastic. d. with excess capacity.

Give typing answer with explanation and conclusion a profit-maximizing, monopolistically competitive firm always operates: a. at an economically efficient scale. b. at the minimum of average total cost. c. at the point where demand is unit elastic. d. with excess capacity.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section16.3: Advertising

Problem 3QQ

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Give typing answer with explanation and conclusion

a profit-maximizing, monopolistically competitive firm always operates: a. at an economically efficient scale. b. at the minimum of average total cost. c. at the point where demand is unit elastic. d. with excess capacity.

Definition Definition Form of market structure in which there are a large number of sellers of a particular product, with each seller selling somewhat differentiated but close substitutes to the product sold by other sellers. Features of monopolistic competition include: Large number of buyers and sellers Differentiated products Free entry and exit of the firms in the market

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