Which of the Following Is True About Long-Run Equilibrium in a Monopolistically

question 4

Multiple Choice

Which of the following is true about long-run equilibrium in a monopolistically competitive market?

• A) Firms earn zero economic profit because price equals long-run average cost, but the equilibrium is not allocatively efficient because price exceeds the marginal cost of the last unit produced.
• B) They may earn negative, zero, or positive economic profit because monopolistically competitive firms are price takers.
• C) Each firm faces a perfectly elastic demand curve and earns zero economic profit because price equals long-run average cost, and are allocatively efficient because price equals marginal cost for the last unit sold.
• D) None of the above are correct.

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Definitions:

Gatekeeping

The process by which information is filtered for dissemination, whether for publication, broadcasting, the Internet, or some other mode of communication.

Centralized Network

A network structure where a central node has direct connections to all other nodes, promoting efficiency and control but potentially limiting flexibility.

Maintenance Activities

Tasks undertaken to keep equipment or systems running efficiently through routine checks and repairs.

Disruptive Activities

involve actions that interrupt or disturb the normal flow of operations and processes, potentially leading to negative outcomes or inefficiencies.