Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ?

A. marginal revenue and then use the demand curve to determine the price consistent with this quantity
B. average total cost and then use the supply curve to determine the price consistent with this quantity
C. marginal revenue and then use the supply curve to determine the price consistent with this quantity
D. average total cost and then use the demand curve to determine the price consistent with this quantity

Correct Answer: marginal revenue and then use the demand curve to determine the price consistent with this quantity ✔

Last Updated: June 18, 2019