Use the Following to Answer Questions

question 66

Multiple Choice

Use the following to answer questions:
Scenario: Monopolistically Competitive Firm
For a monopolistically competitive firm, Q = 160 - P; MC = 20 + 2Q; and TC = 20Q + Q² + 20.
-(Scenario: Monopolistically Competitive Firm) Given the information in the scenario Monopolistically Competitive Firm, in the long run, this firm can expect that:

• A) its demand curve will become more elastic as it dominates the market more.
• B) its economic profits will decrease to zero.
• C) its losses will fall and eventually become a positive economic profit.
• D) other firms will not enter or exit the industry.

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Definitions:

Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life.

Equipment

Tangible assets used in the operation of a business to perform specific tasks, not intended for sale in the ordinary course of business.

Machinery

A category of physical equipment used in the production or manufacturing process.

Indirect Expenses

Costs not directly linked to the production of goods or services, such as office supplies and utility costs.