Solved Problem 13.4 shows that a monopolistically competitive firm maximizes its profit where it is operating at less than full capacity. Does this result depend upon whether firms produce identical or differentiated products? Why?

Data From Solved Problem 13.4:-

Show that a monopolistically competitive firm maximizes its profit where it is operating at less than full capacity or minimum efficient scale, which is the smallest quantity at which the average cost curve reaches its minimum (the bottom of a U-shaped average cost curve). The firm's minimum efficient scale is the quantity at which the firm no longer benefits from economies of scale.