(Scenario: Monopolistically Competitive Firm)Use Scenario: Monopolistically Competitive Firm

question 189

Multiple Choice

(Scenario: Monopolistically Competitive Firm) Use Scenario: Monopolistically Competitive Firm.Given the information in the scenario,in the long run,this firm can expect that: Scenario: Monopolistically Competitive Firm
For a monopolistically competitive firm,the demand curve is given by Q = 160 - P,and the firm's cost functions are: MC = 20 + 2Q and TC = 20Q + Q² + 20.

• A)its demand curve will become more elastic as it dominates the market more.
• B)its economic profits will decrease to zero.
• C)its losses will fall and eventually become a positive economic profit.
• D)other firms will not enter or exit the industry.

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Definitions:

Support Department Costs

The costs associated with departments that do not directly produce goods or services but provide necessary support to production departments, such as maintenance, accounting, and human resources.

Conceptual Advantage

The benefit gained by understanding and applying theoretical concepts to create superior strategies or products.

Cost Drivers

Factors that cause a change in the cost of an activity, used in activity-based costing to allocate costs more accurately.

Product Costing Systems

Methods used to assign production costs to products or services, enabling accurate pricing and profitability analysis.