A Monopolistically Competitive Firm and a Monopoly Are Similar Because

question 49

Multiple Choice

A monopolistically competitive firm and a monopoly are similar because

• A)both firms will earn zero profits in the long run.
• B)both firms always operate at their point of minimum average cost.
• C)they each face a downward-sloping demand curve.
• D)both firms must behave strategically toward other firms in the industry.
• E)each firm has a large number of competitors.

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Definitions:

Dependent Events

Events where the outcome or occurrence of the first affects the outcome or occurrence of the second.

Independent Events

Two or more events where the occurrence of one event does not affect the probability of the other(s).

Mutually Exclusive

Two events that cannot occur at the same time, meaning the occurrence of one event prevents the occurrence of the other.

P(B / A)

The probability of event B occurring given that event A has already occurred, often used in conditional probability and Bayesian statistics.