In the Short Run, a Monopolistically Competitive Firm Produces at the Optimal

question 247

Multiple Choice

In the short run, a monopolistically competitive firm produces at the optimal level of output and is earning positive economic profits. Which of the following must be TRUE for this firm?

• A) MR = MC and P = ATC.
• B) MR = MC and P > ATC.
• C) MR > MC and P = ATC.
• D) P = MR = MC > ATC.

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Definitions:

Strike Replacements

Workers who are hired to fill in for employees who are on strike, often to keep the company operational during labor disputes.

Defensive Lockout

A strategy used by employers to prevent employees from working during a labor dispute to protect the company's assets or interests.

Expected Strike

A labor action anticipated by both employers and employees, typically following unsuccessful negotiations or escalating labor disputes.

Permanent Strike Replacements

Workers hired to take the positions of striking workers on a permanent basis, often used by employers as a strategy to weaken a strike and put pressure on striking employees.