When a Monopolistically Competitive Firm Is in Long-Run Equilibrium

question 170

Multiple Choice

When a monopolistically competitive firm is in long-run equilibrium,

• A)production takes place where ATC is minimized.
• B)marginal revenue equals marginal cost and price equals average total cost.
• C)normal profit is zero and price equals marginal cost.
• D)economic profit is zero and price equals marginal cost.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the financial performance of a company's core activities.

Finished Goods Inventory

The value of a company’s products ready for sale at the end of an accounting period, sitting in the inventory.

Cost of Goods Manufactured

The total production cost of goods that were completed during a specific accounting period.

Underapplied Overhead

The situation where the allocated overhead costs are less than the actual overhead costs incurred.