Refer to the Graph Shown

question 163

Multiple Choice

Refer to the graph shown. According to the graph, this monopolistically competitive industry is currently:

• A) not in long-run equilibrium, and we would expect more firms to enter this industry.
• B) not in long-run equilibrium, and we would expect some firms to exit this industry.
• C) in long-run equilibrium, and so the number of firms will remain unchanged.
• D) in short-run equilibrium with economic profit equal to zero.

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Definitions:

Vacuum Power Brake

A brake booster that uses a vacuum to multiply the force the driver applies to the brake pedal, reducing effort and improving response.

Vacuum Booster

A device that uses engine vacuum to increase the force applied to the brake pedal, thereby enhancing braking power and efficacy.

Electronic Stability Control

A safety technology that automatically detects and reduces loss of traction (skidding), helping to prevent the vehicle from veering off course.

Antilock Brake Systems

A safety system in vehicles that prevents the wheels from locking up during braking, allowing the driver to maintain steering control.