4.4 monopolistic competition - practice frq the graph above shows the demand (d), marginal revenue (mr), marginal cost (mc), and average total cost (atc) curves for one of many profit-maximizing firms operating in the short run in an industry in which there are no barriers to entry. each firm sells a similar but not identical product. (a) at what quantity is the demand for this product unit elastic? explain. (b) use the relationship between the marginal cost curve and the average total cost curve to explain why the average total cost curve is increasing at 40 units