Which of the Following Is True of Firms in Both

question 195

Multiple Choice

Which of the following is true of firms in both monopolistic competition and perfect competition?

• A)Firms face a horizontal demand curve.
• B)Price exceeds marginal revenue.
• C)Firms can enter and leave the industry with relative ease.
• D)Price exceeds marginal cost.
• E)Products are differentiated.

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Definitions:

Present Value

The present worth of a sum of money or cash flows expected in the future, based on a certain rate of return.

Cash Flow

The combined value of financial transactions into and out of an enterprise, crucially affecting its cash reserves.

Present Value

is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Discount Rate

The rate of interest utilized to calculate the current value of future cash flows in a discounted cash flow assessment.