The Diagram Below Shows Demand and Cost Curves for a Monopolistically

question 39

Multiple Choice

The diagram below shows demand and cost curves for a monopolistically competitive firm.
FIGURE 11-3
-Refer to Figure 11-3.A monopolistically competitive firm is allocatively inefficient because in the long-run equilibrium

• A)LRAC is not at its minimum.
• B)MC is greater than price.
• C)price is greater than MC at Q1.
• D)price is greater than LRAC at Q1.
• E)None of the above - the long-run equilibrium is allocatively efficient.

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Definitions:

IRR

Utilized in assessing investment opportunities within capital budgeting, the Internal Rate of Return signifies the estimated profit rate of future investments.

Conflict Resolved

A situation wherein a disagreement, dispute, or discord has been successfully addressed, negotiated, and settled among parties involved.

Cost of Capital

The necessary yield on investment initiatives for a business to uphold its market price and appeal to investors.

Interest Rates

The fee, indicated as a percentage of the principal amount, that a lender charges a borrower for the utilization of resources.