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Answer to Question #128022 in Microeconomics for Floris van Wyk
Question #128022
Explain, with the aid of a graph, the short run equilibrium position of a firm operating in the monopolistic competitive market structure?
Expert's answer
The firm maximizes its profits and produces a quantity where the firm's marginal revenue (MR) is equal to its marginal cost (MC). The firm is able to collect a price based on the average revenue (demand) curve.
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