total revenue that the firm would receive, which is in the third column of Table 10.1. We calculate marginal

revenue, in the fourth column, as the change in total revenue divided by the change in quantity. The final

columns of Table 10.1 show total cost, marginal cost, and average cost. As always, we calculate marginal cost

by dividing the change in total cost by the change in quantity, while we calculate average cost by dividing total

cost by quantity. The following Work It Out feature shows how these firms calculate how much of their

products to supply at what price.

WORK IT OUT

How a Monopolistic Competitor Determines How Much to Produce and at What Price
The process by which a monopolistic competitor chooses its profit-maximizing quantity and price resembles

closely how a monopoly makes these decisions process. First, the firm selects the profit-maximizing quantity to

produce. Then the firm decides what price to charge for that quantity.
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