Monopolistically Competitive Firms Do Not Achieve Allocative Efficiency in the Long

question 224

Multiple Choice

Monopolistically competitive firms do not achieve allocative efficiency in the long run because

• A)marginal cost equals marginal revenue
• B)marginal cost is greater than marginal revenue
• C)marginal cost is less than marginal revenue
• D)price is less than marginal cost
• E)price is greater than marginal cost

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Definitions:

Fixed Assets

Fixed assets are long-term tangible pieces of property or equipment that a firm owns and uses in its operations to generate income.

Statement Of Cash Flows

A firm’s financial statement that summarizes its sources and uses of cash over a specified period.

Accounts Receivable

Unpaid customer accounts for delivered goods or services to a company.

Operating Activities

Activities related to the daily operations of a business, such as selling products, managing costs, and paying employees, as reflected in the company’s cash flow.