For Which of the Following Market Structures Will the Firm's

question 34

Multiple Choice

For which of the following market structures will the firm's demand curve be tangent to the ATC curve in the long run?

• A)Duopoly.
• B)Monopolistic competition.
• C)Oligopoly.

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Definitions:

Financial Leverage

The use of borrowed funds with a fixed cost in order to increase the potential return to shareholders.

Incremental

Relating to or denoting an increase or addition, especially one of a series on a fixed scale.

After-tax Cost

The cost of financing or an expense after accounting for the effects of income tax, often used to compare the true costs of financing options.

Customer Loyalty

The likelihood of repeated business from a customer demonstrated by their repeat purchases or preference for a business's product or service over competitors.