a monopolistically competitive firm maximizes profit or minimizes losses by producing that quantity that corresponds to when marginal revenue equals marginal cost. If average total cost is below the market price, then the firm will earn an economic profit.However, if the average total cost is above the market price, then the firm will incur losses, which will be equal to the average total cost minus the market price multiplied by the quantity produced. It will still minimize losses by producing that quantity where marginal revenue equals marginal cost, but eventually the firm will either have to reverse the losses, or it will have to exit the industry.