The graph that shown would be consistent with a firm in a monopolistically competitive market that is doing its best but still losing money is option B) panel b
What is the competitive market
A firm in a monopolistically competitive market is one that is characterized by a lot of features. There are a large number of firms competing in the market, each offering a somewhat differentiated product.
So, this is one that lowers the ability of any one firm to control the market price. The barriers to entry and the issue of exit are relatively low, which allows new firms to enter the market and compete with existing firms. This competition keeps prices close to marginal cost, but not all the way down to marginal cost as in a perfectly competitive market.
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Which of the graphs shown would be consistent with a firm in a monopolistically competitive market that is doing its best but still losing money?
A) panel a
B) panel b
C) panel c
D) panel d