Monopolistically Competitive Firms Prevent the Efficient Use of Resources Because

question 191

Multiple Choice

Monopolistically competitive firms prevent the efficient use of resources because in long-run equilibrium,

• A) price is less than marginal cost.
• B) price is greater than marginal cost.
• C) price equals marginal cost.
• D) marginal cost is greater than average total cost.

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Definitions:

Geographical Pricing

A pricing strategy where the price of a product or service varies depending on the geographical location or market.

FOB Freight-Allowed

A shipping term indicating that the seller pays for the transportation of goods to a specific location, but the buyer assumes the risk of loss once shipped.

Basing-Point Pricing

A pricing strategy where the price of goods includes transportation costs from a specific location, regardless of the actual shipment origin.

Deceptive Pricing

Pricing practices intended to mislead or trick consumers about the actual cost of a product or service.