In the Long Run, a Monopolistically Competitive Firm Charges a Price

question 95

Multiple Choice

In the long run, a monopolistically competitive firm charges a price that is

• A)equal to marginal cost.
• B)less than marginal cost.
• C)greater than the minimum average total cost.
• D)equal to the minimum average total cost.
• E)equal to marginal revenue.

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Definitions:

Wage Affected

The impact on employees' earnings due to various factors like inflation, demand for labor, or changes in government policy.

Marginal Product

The growth in production resulting from one more unit of input.

Equilibrium Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded in the labor market.

Marginal Product

The additional output resulting from a one-unit increase in the use of a particular input, holding all other inputs constant.