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Your friend Stanne owns a coffee shop in a monopolistically competitive industry. One day, Stanne tells you (an economist) that he is earning an economic

Your friend Stanne owns a coffee shop in a monopolistically competitive industry. One day, Stanne tells you (an economist) that he is earning an economic profit and is setting his price equal to his marginal cost. Is Stanne producing the profit-maximizing amount of coffee? What should he do?

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