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5 October, 13:31

Advanced Printing Systems is a firm in a monopolistically competitive market. If its marginal cost is $18 per unit in the short run, if it is maximizing profits, and if it is selling at the equilibrium quantity, what is its marginal revenue?

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  1. 5 October, 17:01
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    Answer: Marginal Revenue = $18 per unit

    Explanation:

    The profit maximizing condition for a firm in a monopolistic competitive market is at MR = MC.

    So, the marginal revenue of the firm is equal to the marginal cost of the firm.

    In this question, the firm's marginal cost is $18 per unit in the short run and it is a profit maximizing firm. Thus, its marginal revenue is $18 per unit.
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