How is selling price determined at optimum level of output

Reference no: EM13686074

A firm operating under monopolistic competition - a price maker - is facing an unexpected inventory build up due to a weakening national economy.

1. How does this firm allocate output between its several plants?

2. How is the selling price determined at the optimum level of output?

3. Explain the two key rules that the firm must consider in planning its output for the next 2 quarters.

4. A monopoly will face a dissimilar situation from the firm discussed above; are there any differences in determining pricing for a monopolist vs. a firm under monopolistic competitor?

Reference no: EM13686074

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