With Regard to the Long- Run Equilibrium in the Two

question 53

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) resources are being used inefficiently in perfect competition.
• B) the government should force monopolistically competitive firms to behave like perfectly competitive firms.
• 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) society would be better off if there were fewer, and more homogeneous, goods produced at the scale at which average costs are minimized.

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Definitions:

Sterile Water

Water that has been purified and treated to remove all microorganisms and contaminants, used for medical applications.

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Regular cyclic events in females marked by the shedding of the uterine lining, typically occurring monthly from puberty until menopause.

Bleeding

The loss of blood from the circulatory system due to injury or illness.

Premenstrual Syndrome

A group of symptoms that women may experience typically 1-2 weeks before their menstrual period, including mood swings, tender breasts, food cravings, fatigue, irritability, and depression.