Which Statement Is TRUE

question 43

Multiple Choice

Which statement is TRUE?

• A)For choosing the profit-maximizing quantity,the short-run decision-making process of a firm in perfect competition is the same as that of a firm in monopolistic competition since they produce so that P > MC.
• B)In the long run in perfect competition,economic profits equal zero,and in monopolistic competition in the long run,economic profits are very large.
• C)In perfect competition,P = MC,and in monopolistic competition,MR = MC,but P > MC and there is excess capacity.
• D)In both perfect competition and monopolistic competition,P equals minimum average total cost in the long run.

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Definitions:

Total Variable Cost

The sum of all costs that vary directly with the level of production or output, such as materials and labor.

Total Fixed Cost

the sum of all costs that remain constant regardless of the level of production or business activity.

Weekly Cost

Expenses calculated on a weekly basis, tracking the regular outflow of cash for operations or living expenses.

Total Costs

The sum of all expenses incurred by a business in the production of goods or services, including fixed and variable costs.