Choose the Correct Statement About Firms in Monopolistic Competition

question 45

Multiple Choice

Choose the correct statement about firms in monopolistic competition.

• A)All firms make positive economic profit.
• B)The price is set equal to marginal cost to achieve maximum economic profit.
• C)Price is lower than in perfect competition.
• D)Production always takes place at minimum average total cost.
• E)The price is always greater than the marginal cost.

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Definitions:

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and record them as an expense.

Bad Debts

Money owed to a company that is considered irrecoverable and is written off as a loss.

Outstanding Balances

The total amount of money owed that has not yet been paid.

Credit Card

A plastic card issued by a bank allowing the cardholder to borrow funds at the point of sale, which are to be repaid with interest.