Which of the Following Is True Regarding the Long Run

question 229

Multiple Choice

Which of the following is true regarding the long run for a firm in monopolistic competition?

• A) The firm can make an economic profit because of product differentiation.
• B) Marginal cost equals average total cost.
• C) Output is produced at minimum average total cost.
• D) Price equals average total cost.

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Definitions:

Endowment Effect

Tendency of individuals to value an item more when they own it than when they do not.

Reference Point

A basis or standard for evaluation, comparison, or judgment.

Original Endowment

The initial allocation of income, wealth, resources, or goods that an individual or economy possesses before engaging in trade or production activities.

Behavioral Economics

A field of study blending economics and psychology to explore how people make decisions, often deviating from rationality.