Consider a Monopolistically Competitive Firm in a Market in Long-Run

question 214

Multiple Choice

Consider a monopolistically competitive firm in a market in long-run equilibrium. This firm is likely earning

• A)a positive economic profit since it is charging a price above marginal cost.
• B)no economic profit since it is charging a price equal to its marginal cost.
• C)a positive economic profit since it is charging a price above its average total cost.
• D)no economic profit since it is charging a price equal to it average total cost.

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Definitions:

Totals and Subtotals

Sums presented in financial statements or reports that represent the aggregation of financial data, with subtotals used to group related items together under a common category.

Dividends Payable

Refers to the amount of dividend that a company has declared to distribute to its shareholders but has not yet paid out.

Ex-dividend Basis

A stock trading status indicating that the security is sold without the right to receive the next dividend payment.

Consolidation

The process of combining the financial statements of separate subsidiaries, divisions, or entities under a single parent company to produce a unified set of financial statements.