Figure 8.2 -Figure 8.2 Shows Demand and Costs for a Monopolistically Competitive

question 260

Multiple Choice

Figure 8.2
-Figure 8.2 shows demand and costs for a monopolistically competitive firm. In the long run we expect

• A) the firm to produce more output at a higher price.
• B) the firm to charge a price which is equal to its average cost of production.
• C) the firm to experience a decrease in the average cost of production.
• D) the firm to earn a greater profit.

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