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Question
Which of the following statements about a monopolistically competitive firm is TRUE?
A) A monopolistically competitive firm does not always equate marginal cost to marginal revenue because it uses other means to maximize profits.
B) A monopolistically competitive firm maximizes profits by charging a price equal to marginal cost.
C) A monopolistically competitive firm produces the quantity at the point at which the demand curve crosses the marginal cost curve.
D) A monopolistically competitive firm maximizes profits when it produces the quantity at which marginal cost equals marginal revenue.
Answer
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