EXHIBIT A: Profit Maximization for a Firm in Monopolistic Competition Price and cost $40 MC ATC 30 23 ATCI 20 10 MR AR = D 0 150 200 Quantity per day 7. (Exhibit A: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Before the innovation reduced the cost, the firm's maximum economic profit was: A) $0. B) $30. C) $750. D) $4,500. 8. (Exhibit A: Profit Maximization for a Firm in Monopolistic Competition.) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' After the innovation reduced the cost, the firm's maximum economic profit is: A) $0. B) $30. C) $1,500. D) $3,000