FIGURE 11- 2

question 88

Multiple Choice

FIGURE 11- 2
-Refer to Figure 11- 2.Diagram D depicts the only possible long- run equilibrium for a typical firm in

• A)a monopolistic industry.
• B)a monopolistically competitive industry.
• C)an oligopolistic industry.
• D)a perfectly competitive industry.
• E)None of the above - it is not a long- run equilibrium.

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Definitions:

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a good or service.

Average Total Cost

The total cost of production divided by the total output or quantity produced.

Monopolistically Competitive Firm

A firm that operates in a market with many competitors, each offering a slightly different product.

Profit-Maximizing Quantity

The level of production at which a firm achieves the highest possible profit, where marginal revenue equals marginal cost.