In the Short Run,a Monopolistically Competitive Firm

question 84

Multiple Choice

In the short run,a monopolistically competitive firm

• A)May make economic profits,but it fails to make economic profits in the long run because of the entry of new firms.
• B)May make profits just as it does in the long run because firms can enter easily.
• C)Produces at a rate at which long-run average cost equals price,but not at which long-run marginal cost equals marginal revenue.
• D)Makes profits just as it does in the long run because entry is blocked.

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Definitions:

Sunk Costs

Expenses that have already been incurred and cannot be recovered or altered, and should not affect future business decisions.

Project Analysis

Project analysis involves assessing the viability, impact, and feasibility of a project before financial resources are allocated.

Erosion

The gradual loss or decline of an economic or business value over time.

Product Market

The marketplace in which final goods or services are offered to consumers, businesses, and the public sector.