A monopolistic competitor wishing to maximize profit will select a quantity where:

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  1. A monopolistic competitor wishing to maximize profit will select a quantity where:
    a) Marginal revenue equals marginal cost
    b) Marginal cost equals demand
    c) Marginal cost equals average cost
    d) Marginal revenue equals average cost

  2. If a firm is producing a quantity where marginal revenue exceeds marginal costs, the firm should _____ existing levels of production, in order to _____.
    a) Decrease; increase total revenue
    b) Expand; decrease total costs
    c) Decrease; increase profitability
    d) Expand; increase profitability

  3. If a firm producing a quantity where marginal cost exceeds marginal revenue, the firm should _____ existing levels of production, in order to _____.
    a) Expand; decrease total costs
    b) Expand; increase profitability
    c) Decrease; increase total revenue
    d) Decrease; increase profitability