In Monopolistic Competition the Costs of Less Than Optimal Production

question 15

Multiple Choice

In monopolistic competition the costs of less than optimal production may be counteracted by:

• A) the gain in economic welfare that results from production differentiation
• B) the fact that what is produced is sold at a price that is equal to marginal cost
• C) the fact that what is produced is sold at a price that is greater than marginal cost
• D) the economic profit that producers can make in the long run

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Definitions:

Figure Ambiguity

The quality of an image or representation that leads to multiple interpretations due to its unclear form.

Interposition

A visual cue in depth perception where one object partly covers another, indicating that the former is closer to the viewer than the latter.

Relative Size

An aspect of visual perception that allows one to judge the size of an object in relation to other objects within the same field of view.

Linear Perspective

A system of creating an illusion of depth on a flat surface by converging lines in a painting or drawing to a single vanishing point on the composition's horizon line.