Compared with Competition, Long-Run Equilibrium in a Monopolistically Competitive Industry

question 53

Multiple Choice

Compared with competition, long-run equilibrium in a monopolistically competitive industry results in

• A)lower prices and greater output.
• B)higher prices and lower output.
• C)lower prices and lower output.
• D)higher prices and greater output.
• E)prices and output that can be higher or lower.

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Definitions:

Invested Capital

The total amount of money that shareholders and debt holders have committed to a company for its operations.

Sales

The activities involved in selling goods or services to customers, including negotiation, closing deals, and transaction processing.

Asset Turnover

A financial ratio that measures the efficiency of a company’s use of its assets in generating sales revenue.

Sales Revenue

The gross revenue is the entirety of income that comes from selling products or services, prior to deducting any costs.