In a monopolistically competitive market, the relationship between price and marginal cost is analogous to the relationship between: A. Demand and supply in a perfectly competitive market B. Total revenue and total cost in a monopoly C. Average total cost and marginal revenue in a monopoly D. Fixed costs and variable costs in a competitive market

In a monopolistically competitive market, firms have some control over their prices because they sell products that are somewhat different from each other. This means that the price a firm sets is usually higher than the marginal cost of producing one more unit, which is the cost of producing that additional item. The relationship is similar to option C, where average total cost and marginal revenue in a monopoly show that monopolies also set prices above marginal costs to maximize profit. For example, if a café sells coffee at $4 but it costs them $2 to make one more cup, they are operating in a way that reflects this price-setting behavior. Thus, in both cases, firms are balancing their pricing strategies against their costs to maximize their profits.