In the Long Run, a Representative Firm in a Monopolistically

question 105

Multiple Choice

In the long run, a representative firm in a monopolistically competitive industry will end up

• A)having an elasticity of demand that will be less than it was in the short run.
• B)having a larger number of competitors than it will in the short run.
• C)producing a level of output at which marginal cost and price are equal.
• D)earning a normal profit, but not an economic profit.

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Definitions:

Overapplied Manufacturing Overhead

This occurs when the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Underapplied Manufacturing Overhead

This occurs when the allocated cost for manufacturing overhead is less than the actual overhead costs incurred, indicating a shortfall in cost coverage.

Work in Process

Inventory that includes goods that are in production but not yet complete.

T-Accounts

A graphical representation of a general ledger account that records the debit and credit transactions and their balances.