A Monopolistically Competitive Firm Faces the Following Demand Curve for Its

question 80

Multiple Choice

A monopolistically competitive firm faces the following demand curve for its product: The firm has total fixed costs of $40 and a constant marginal cost of $2 per unit.We can conclude that

• A) firms will exit this market.
• B) firms will enter this market.
• C) this market is in long-run equilibrium.
• D) this firm is operating at its efficient scale.

---

Definitions:

Partnership

A legal and business arrangement between two or more individuals who share management and profits or losses of the business endeavor.

Regulatory Controls

Rules and regulations established by government or regulatory bodies to control the way businesses operate, ensuring safety, fairness, and compliance.