-The Above Figure Shows the Demand and Cost Curves for a Firm

question 26

Multiple Choice

-The above figure shows the demand and cost curves for a firm in monopolistic competition. In the figure, the firm makes an economic profit of

• A) $0.
• B) $120.
• C) $40.
• D) $20.

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Definitions:

Retained Earnings

Profits that a company keeps or reinvests after dividends are paid out to shareholders, instead of distributing them completely.

Optimal Market Structure

A market configuration that maximizes efficiency and consumer welfare, often characterized by competitive markets, absence of monopolies, and minimal barriers to entry.

Technological Advance

The development of new technologies or the improvement of existing ones, which can lead to increased efficiency, productivity, and economic growth.

Oligopolistic Firms

Companies that operate in an oligopoly, a market structure characterized by a small number of firms controlling the majority of the market share.