After determining its profit-maximizing quantity of output, how does a monopolistic competitor choose its price? Group of answer choices

a. The firm will look at the demand curve to find out what it could charge for that quantity of output.

b. The firm will look at the average cost curve to find out what it could charge for that quantity of output.

c. The firm will look at the marginal revenue curve to find out what it could charge for that quantity of output.

a. The firm will look at the demand curve to find out what it could charge for that quantity of output.

Explanation:

The monopolistic competition market has a large number of competing vendors and producers. In this type of market, firms compete by producing substitute (differentiated) goods that can replace each other, not homogeneous goods, while competing. The production of differentiated goods gives this market a competitive and monopolistic character, but because there are many vendors in the market, prices cannot be determined by a small number of companies. What is important in the monopolistic competition market is that the goods are attractive, preferable and indispensable. Characteristics of monopolistic competition:

1) Many sellers.

2) Differentiated products, products are not exactly the same as in the competitive market. Firms are not the determinants of the price.

3) Companies can enter and exit the market without restrictions. This traffic continues until the profit of the firms is worthless.

A profit-maximizing monopolistic competitor will have a target of the quantity in that case, marginal revenue should be equal to marginal cost and then he monopolistic competitor will start generate that level of output and finally, will decide charge the price which is indicated by the firm's demand curve. That demand curve will not be flat but downward sloped.