Refer to Figure 15.4. Assume The Hand Made Shirt Shop has fixed costs of $90 and is a monopolistically competitive firm. If the firm is attempting to maximize profits, its profit is

A) -$175.
B) -$100.
C) -$90.
D) $0.

Question

Travis Peralta · Accepted Answer

Final Answer : C, Explanation :  To maximize profits, a monopolistically competitive firm will produce where marginal cost (MC) equals marginal revenue (MR). Without the specific figure (Figure 15.4), we can't directly observe the quantities, prices, or costs. However, given the fixed costs of $90 and the options provided, the only logical deduction we can make without additional information is that if the firm is covering its variable costs but not making enough to cover its fixed costs entirely, it would report a loss equal to its fixed costs, assuming it's not covering any part of them with its revenue. Thus, a loss of -$90 (option C) suggests the firm is covering variable costs but not making any profit over its fixed costs.

Refer to Figure 15.4. Assume The Hand Made Shirt Shop has fixed costs of $90 and is a monopolistically competitive firm. If the firm is attempting to maximize profits, its profit is

A) -$175.
B) -$100.
C) -$90.
D) $0.

Definitions

Learning Objectives

Learning Objectives

Related questions

Refer to Figure 15.4. Assume The Hand Made Shirt Shop has fixed costs of $90 and is a monopolistically competitive firm. If the firm is attempting to maximize profits, its profit isA) -$175.B) -$100.C) -$90.D) $0.

Definitions

Learning Objectives

Learning Objectives

Related questions

Refer to Figure 15.4. Assume The Hand Made Shirt Shop has fixed costs of $90 and is a monopolistically competitive firm. If the firm is attempting to maximize profits, its profit is

A) -$175.
B) -$100.
C) -$90.
D) $0.