The Difference Between Short-Run Demand and Long-Run Demand for a Monopolistic

question 107

Multiple Choice

The difference between short-run demand and long-run demand for a monopolistic competitor is

• A)There is no difference between long-run and short-run demand for a monopolistic competitor.
• B)long-run demand results in no economic profit, whereas short-run demand might result in profits or losses.
• C)in the long run demand slopes downward, but in the short run it is horizontal.
• D)the long-run demand is elastic, whereas the short-run demand is inelastic.
• E)in the short run demand slopes downward, but in the long run it is horizontal.

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Definitions:

Short-Run Total Cost

The total of all costs incurred in the production process when some factors of production are fixed.

Production Function

An equation, table, or graph that shows the maximum output of goods and services that can be produced with varying inputs under certain technological constraints.

Labor

The human effort, both physical and mental, used in the production process.

Average Cost

The cost per unit, determined by dividing the total production costs by the quantity of units produced.