Asked by Brittney Kersey on May 27, 2024
Verified
Refer to Figure 15.2. The ________ quantity of perms for We Do Hair, a monopolistically competitive firm, is 40.
A) profit-maximizing
B) loss-minimizing
C) break-even
D) shut down
Monopolistically Competitive
An economic model where numerous companies offer products that are alike but not exactly the same, granting them a certain level of influence over the market.
Profit-Maximizing Quantity
The level of output at which a company achieves the highest possible profit, where marginal cost equals marginal revenue.
- Analyze and establish the peak profit output levels and pricing for firms within monopolistic competition.
- Pinpoint tactics for elevating financial gains or diminishing financial deficits shortly.
Verified Answer
KG
Kazuno GatakanoMay 28, 2024
Final Answer :
A
Explanation :
The profit-maximizing quantity for a firm, regardless of market structure, is determined where marginal cost (MC) equals marginal revenue (MR). In the context of the question, without seeing Figure 15.2, we rely on standard economic theory which suggests that a monopolistically competitive firm, like any firm, seeks to maximize profit by adjusting its output to the point where MC equals MR, which is described as the profit-maximizing level of output.
Learning Objectives
- Analyze and establish the peak profit output levels and pricing for firms within monopolistic competition.
- Pinpoint tactics for elevating financial gains or diminishing financial deficits shortly.