Assess students' ability to analyze how price elasticity of demand and marginal cost determine a firm's profit-maximizing price and output under monopolistic competition. Include tasks to (a) derive and apply the markup/Lerner formula using elasticity, (b) solve numerical MR=MC and elasticity-based pricing problems, (c) interpret demand and MR graphs for pricing/output decisions, and (d) evaluate short-run versus long-run adjustments (entry, zero economic profit, and excess capacity) with brief written explanations of welfare and strategic implications.