Refer to the Above Graph of a Representative Firm in Monopolistic

question 119

Multiple Choice

Refer to the above graph of a representative firm in monopolistic competition. If curve (2) represents ATC and line (3) represents demand, then we can conclude that the industry

• A)has positive economic profits.
• B)is in long-run equilibrium.
• C)will contract in the long run.
• D)is not maximizing profits.

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