Which of the Following Is True

question 183

Multiple Choice

Which of the following is true?

• A)When choosing the profit-maximizing quantity, the short-run decision-making process for a firm in perfect competition and a firm in monopolistic competition is the same, since they produce the quantity where P > MC.
• B)In the long run in perfect competition, economic profits = 0, and in monopolistic competition in the long run, economic profits are very large.
• C)In perfect competition, P = MC, and in monopolistic competition, MR = MC, but P > MC and there is excess capacity.
• D)In both perfect competition and monopolistic competition, P equals minimum average total cost in the long run.

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Definitions:

Personal Income Tax

A tax levied on individuals or households based on their income, including wages, dividends, and interest.

Regressive

This term usually applies to a tax system where the tax rate decreases as the taxable amount increases, placing a higher relative burden on lower-income earners.

Bush Tax Cuts

A series of temporary income tax relief measures enacted by President George W. Bush in 2001 and 2003, aimed at stimulating the US economy.

Percentage Tax Rate

The portion of one's income or the cost of a transaction that must be paid as tax, expressed as a percentage.