Reference: Ref 15-9 (Figure: Monopolistic Competition) Refer to the Figure

question 122

Multiple Choice

Reference: Ref 15-9 (Figure: Monopolistic Competition) Refer to the figure. Suppose the figure represents a firm that operates in a monopolistic competitive market. In the long run you would expect price in this market to:

• A) stay the same.
• B) increase as unprofitable firms leave the industry.
• C) decrease to the point that P = AC.
• D) decrease to the point that P = MC.

---

Definitions:

Sporting Equipment

Items and gear used in sports and physical activities to enhance performance or ensure safety.

Direct Materials

The raw materials that are directly used in the manufacturing of a product and can be easily traced to it.

Job 101

A specific task or project identified by a numerical code, often used in job costing systems to track costs and progress.

Predetermined Overhead Rate

A rate calculated before a period begins, based on the estimated overhead costs and estimated activity base, used to allocate overhead costs to products or job orders.