Which of the Following Statements Is True for Both a Competitive

question 45

Multiple Choice

Which of the following statements is true for both a competitive market and a single-price monopoly?

• A) The firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost.
• B) The firm can make an economic profit in the long run.
• C) The price is set where the supply curve and demand curve intersect.
• D) The firm always produces at the lowest possible long-run average cost.

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Definitions:

Special Order

An order that deviates from the regular product offerings of a business, often requiring unique pricing and terms.

Regular Customers

Individuals who frequently purchase goods or services from the same business, showing loyalty and habitual buying.

Relative Sales Value Method

A cost allocation technique that distributes joint costs to multiple products based on their relative sales values.

Joint Costs

Costs incurred in the process of producing two or more products at the same time, which cannot be easily attributed to individual products.