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Question
A monopolistically competitive firm maximizes profits when it
A) produces the quantity at which marginal cost equals the market price.
B) produces the quantity at which marginal cost equals marginal revenue and uses the demand curve to determine the market price.
C) produces the quantity at which marginal cost equals marginal revenue and sets the price equal to the marginal cost.
D) produces the quantity at which marginal cost equals marginal revenue and sets the price equal to the marginal revenue.
Answer
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