With Regard to the Long-Run Equilibrium in the Two Market

question 39

Multiple Choice

With regard to the long-run equilibrium in the two market structures,the higher unit costs in monopolistic competition relative to perfect competition implies that

• A)society would be better off if there were fewer,and more homogeneous,goods produced at the scale at which average costs are minimized.
• B)resources are being used inefficiently in perfect competition.
• C)there is a tradeoff between product variety and the ability to minimize cost per unit.
• D)firms are restricting output to extract positive economic profits.
• E)the government should force monopolistically competitive firms to behave like perfectly competitive firms.

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Definitions:

Strategy

Strategy refers to a high-level plan or set of actions designed to achieve long-term goals or overall objectives.

Tactics

Strategies or maneuvers used in negotiations, conflicts, or competitions to gain an advantage or achieve specific objectives.

Relationship outcomes

the possible results or endings of interactions between two or more parties.

Accommodation

A strategy in conflict resolution where one party yields to the wishes or demands of another to maintain harmony and avoid conflict.