Which of the Following Statements Is Not True for a Monopolistically

question 255

Multiple Choice

Which of the following statements is not true for a monopolistically competitive industry?

• A)Firms tend to operate with excess capacity.
• B)Each firm faces a downward-sloping demand curve.
• C)These firms earn zero economic profits in the long run.
• D)Firms operate at the lowest point of their ATC curves in the long run.

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Definitions:

Contract Actions

Legal steps taken to enforce, modify, or terminate agreements between parties based on the terms of the contract.

Punitive Damages

Financial compensation awarded in a lawsuit intended to punish the defendant for egregious or malicious behavior, and deter similar conduct in the future.

Merchants

Individuals or businesses engaged in the trade of goods, services, or commodities for profit.

Liquidated Damages

A predetermined amount of money that must be paid as compensation for failure to perform under a contract.