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

question 90

Multiple Choice

When a profit-maximizing firm in a monopolistically competitive market charges a price higher than marginal cost,

• A)the firm must be earning a positive economic profit.
• B)the firm may be incurring economic losses
• C)society benefits due to the firm's excess capacity.
• D)new firms will enter the market in the long run.

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Definitions:

Carbanion

A negatively charged ion (anion) that consists of a carbon atom having a pair of non-bonded electrons.

Free Radical

Highly reactive atoms or molecules with an unpaired electron, involved in various chemical reactions.

Carbene

A highly reactive molecule featuring a carbon atom with two non-bonded electrons, making it very reactive.

Intermediates

Reactive species that are formed during the chemical reactions and lie in the reaction pathway between the reactants and the final products.