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A monopolistically competitive firm notices that its marginal cost has increased. To continue maximizing profit, what should the firm do?
How does monopolistic competition impact consumer preferences and social efficiency?
What is the condition for allocative efficiency?
In what way does monopolistic competition affect social efficiency despite catering to diverse consumer preferences?
How do productive and allocative efficiency differ in monopolistic competition compared to perfect competition?
How does the variety of products in monopolistic competition affect social efficiency?
What is the condition for productive efficiency in perfect competition?
In what way does the profit-maximizing behavior of monopolistically competitive firms lead to a failure in allocative efficiency?
In perfect competition, what is the relationship between price and marginal cost at the allocatively efficient quantity?
In monopolistic competition, why is the quantity produced not allocatively efficient?