Post Utme Veritas University 2023 Economics Question 6

Practice objective / multiple choice question 6 from the 2023 Post Utme Veritas University Economics examination.

Post Utme Veritas University 2023 Economics Objective / Multiple Choice
Question 6 POST_UTME_VERITAS_UNIVERSITY • 2023 • ECONOMICS • objective

A monopolistically competitive firm faces a downward-sloping demand curve and has the ability to produce a unique product. If the firm's marginal revenue (MR) curve intersects its marginal \cost (MC) curve at a point where MR > MC, what will be the firm's optimal price and quantity?

Answer Options

A. The firm will produce at a point where MR = MC, and the optimal price and quantity will be determined by the intersection of the demand curve and the MC curve.
Correct Answer B. The firm will produce at a point where MR > MC, and the optimal price and quantity will be determined by the intersection of the demand curve and the MR curve.
C. The firm will produce at a point where MR < MC, and the optimal price and quantity will be determined by the intersection of the demand curve and the MC curve.
D. The firm will not produce at all, as the MR curve does not intersect the MC curve.
Correct Answer
B
Correct Option:
The firm will produce at a point where MR > MC, and the optimal price and quantity will be determined by the intersection of the demand curve and the MR curve.

About This Question

This is Post Utme Veritas University 2023 Economics Question 6. It is one of the objective questions from the 2023 Post Utme Veritas University Economics examination.

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