Use the Following to Answer Question

question 172

Multiple Choice

Use the following to answer question:
Figure: Profit Maximization in Monopolistic Competition
-(Figure: Profit Maximization in Monopolistic Competition) Use Figure: Profit Maximization in Monopolistic Competition.In panel (B) of the figure,the long-run equilibrium will result in:

• A)no economic profits.
• B)no accounting profits.
• C)a tangency of the ATC curve with the MR curve.
• D)no economic profits and a tangency of the ATC curve with the MR curve.

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Definitions:

Market Rewards

The returns or gains that investors expect to earn from their investments in the financial markets.

Non-diversifiable Risks

Risks that affect all investments across the market and cannot be mitigated through diversification.

Financial Markets

Marketplaces where individuals and entities can trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand.

Market Risk Premium

The added financial return that an investor predicts when opting for a market portfolio with inherent risk over guaranteed risk-free assets.