In Monopolistic Competition,a Firm's Demand Curve Is Tangent to the ATC

question 106

Multiple Choice

In monopolistic competition,a firm's demand curve is tangent to the ATC curve in the long run because

• A)Barriers to entry are high.
• B)Entry eliminates economic profit,and exit eliminates losses.
• C)Advertising is ineffective in differentiating the product.
• D)Producers are price takers.

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Definitions:

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A mood disorder in which manic episodes alternate with periods of depression, usually with relatively normal periods in between.

Lithium

A chemical element used in the treatment of bipolar disorder to stabilize mood swings.

Bipolar Disorder

A mental health condition causing extreme mood swings that include emotional highs (mania or hypomania) and lows (depression).