Which of the Following Statements Is Correct

question 153

Multiple Choice

Which of the following statements is correct?

• A)Purely competitive firms, monopolistically competitive firms, and pure monopolies all earn zero economic profits in the long run.
• B)Purely competitive firms, monopolistically competitive firms, and pure monopolies all earn positive economic profits in the long run.
• C)In the long run, purely competitive firms and monopolistically competitive firms earn zero economic profits, while pure monopolies may or may not earn economic profits.
• D)Monopolistically competitive firms earn zero economic profits in both the short run and the long run.

Distinguish between perfectly inelastic and perfectly elastic demand.

Analyze the relationship between price changes and total revenue.

Identify the elasticity section of the demand curve (elastic, inelastic, unit elastic).

Understand the effect of government policies on consumption based on price elasticity.

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Definitions:

Benzodiazepines

A class of psychoactive drugs used to treat conditions such as anxiety, insomnia, and seizures by enhancing the effect of the neurotransmitter GABA in the brain.

Tranquilizers

Medications designed to reduce tension or anxiety without inducing sleep.

Nocebos

Negative health effects that result from the mere belief or expectation that something is harmful, even if it contains no active ingredients or harmful properties.

Dissolves

The process by which a solid becomes incorporated into a liquid to form a solution.