When a Profit-Maximizing Firm in a Monopolistically Competitive Market Is

question 496

Multiple Choice

When a profit-maximizing firm in a monopolistically competitive market is producing the long-run equilibrium quantity,

• A)its average revenue will equal its marginal cost.
• B)its marginal revenue will exceed its marginal cost.
• C)it will be earning positive economic profits.
• D)its demand curve will be tangent to its average total cost curve.

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Definitions:

Par Value

The nominal or face value of a stock or bond as stated by the issuing company, often used in legal documents.

Market Price

The current price at which an asset or service can be bought or sold in a public market.

Cash Dividend

A payment made by a company out of its profits to its shareholders in cash, typically on a regular basis.

Treasury Stock

Shares that were once part of the outstanding shares and have been bought back by the issuing company, reducing the amount of stock on the open market.