Final answer:
Economics students learn that in order to maximize revenue, a monopolistic competitor and a perfectly competitive firm must produce at a quantity where marginal revenue equals marginal cost. For a monopolistic competitor, they find the optimal quantity and price, while a perfectly competitive firm looks at the price equal to marginal cost.
Step-by-step explanation:
The student's question is related to the concept of maximizing revenue in the context of a monopolistic competitor and a perfectly competitive firm within economics. The revenue-maximizing rule for both types of firms involves setting output and price levels where marginal revenue (MR) equals marginal cost (MC). For a monopolistic competitor, such as the Authentic Chinese Pizza shop mentioned in the example, this would mean choosing a quantity of output (Q) where MR equals MC, which is at a quantity of 40 and a price of $16. In the case of a perfectly competitive firm, since marginal revenue received equals the price (P), the firm would maximize profits by producing at a quantity where P equals MC. It is important to note that each firm's optimal pricing and output decisions are based on the intersection of the MR and MC curves.