A Firm in Monopolistic Competition Has Some Degree of Price-Setting

question 205

Multiple Choice

A firm in monopolistic competition has some degree of price-setting power because

• A) in the long run it earns a normal profit.
• B) it can never earn less than normal profit.
• C) the price it charges is never more than its marginal cost.
• D) if it raises its price, the quantity it can sell will not decrease to zero.

---

Definitions:

Silver

A precious metal with high electrical and thermal conductivity, used in jewelry, silverware, and industrial applications.

S&P 500 Index

A stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States, often used as a benchmark for the overall U.S. equity market.

Futures Contract

An official agreement setting terms for the future buying or selling of assets at a price fixed in advance.

Value

The financial worth of an asset, security, or company, based on factors like earnings, growth potential, and market conditions.