Product Differentiation in Monopolistically Competitive Markets Ensures That, for Profit-Maximizing

question 100

Multiple Choice

Product differentiation in monopolistically competitive markets ensures that, for profit-maximizing firms,

• A)marginal revenue will equal average total cost.
• B)price will exceed marginal cost.
• C)marginal cost will exceed average revenue.
• D)average variable cost will be declining.

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Definitions:

Utility Schedule

A table or graph that shows the satisfaction or utility a consumer derives from consuming different quantities of a good or service.

Total Utility

The overall satisfaction or enjoyment a person gets from consuming a certain quantity of goods or services.

Marginal Utility

The boost in contentment or usefulness someone achieves from consuming an additional item of a good or service.

Consumer Surplus

The variance between the price consumers intend to pay for a good or service and the price they actually incur.