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If a monopolistically competitive​ seller's marginal cost is​ $3.56, the firm will decrease its output if

User Hemanta
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Final answer:

A monopolistically competitive firm will decrease its output if the marginal revenue it earns is less than its marginal cost.

Step-by-step explanation:

In a monopolistically competitive market, a seller's profit is maximized when marginal revenue (MR) equals marginal cost (MC). If the marginal cost of a firm is $3.56, the firm will decrease its output if the marginal revenue it earns from selling additional units of its product is less than $3.56. By reducing output, the firm can reduce its costs and maintain profitability.

User Terry Gardner
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