Table 16-5 This Table Shows the Demand Schedule, Marginal Cost, and Average

question 11

Multiple Choice

Table 16-5
This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm.
-Refer to Table 16-5. Which of the following statements regarding this monopolistically competitive firm is correct?

• A)New firms will enter this market in the long run since firm profits are greater than zero.
• B)Firms will leave this market in the long run since firm profits are less than zero.
• C)This firm is currently in long-run equilibrium.
• D)This firm is currently in long-run equilibrium, and the firm is producing its efficient scale of output.

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Definitions:

Initial Costs

Initial expenses required to start a project, including setup, acquisition, or investment costs.

MIRR

Modified Internal Rate of Return, a financial measure used to assess the attractiveness of investments, adjusting for the cost of capital and considering the reinvestment of cash flows.

NPV

Net Present Value, a method used in investing to calculate the difference between the present value of cash inflows and outflows over a period of time.

Required Rate Of Return

The minimum return that an investor is willing to accept for owning a company's stock, given its risk.