Refer to the Graph Shown of a Monopolistically Competitive Firm

question 143

Multiple Choice

Refer to the graph shown of a monopolistically competitive firm. You can conclude that:

• A) new firms will enter the industry in the long run.
• B) existing firms will exit the industry in the long run.
• C) the industry is in long-run equilibrium.
• D) the price of dresses is equal to the minimum possible average total cost.

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Definitions:

Close Substitutes

Goods or services that can serve as replacements for each other with minimal difference in utility for the consumer.

Oligopolistic

Describing a market structure dominated by a few large producers or sellers who have significant control over prices and market share, often resulting in limited competition.

Monopolistic

Relates to a market structure where a single firm dominates the market, often leading to limited competition.

Differentiate Products

The strategy of distinguishing a product from its competitors through design, features, branding, or quality.