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.

---

Definitions:

Demographic Transition Theory

A theory that describes the transition from high birth and death rates to lower birth and death rates as a country or region develops from a pre-industrial to an industrialized economic system.

Industrialization

The process of developing industries in a country or region on a wide scale.

Fertility Rate

The mean number of offspring a woman has during her life in a certain demographic group.

Niger

A landlocked country in West Africa named after the Niger River and known for its diverse cultures and significant natural resources.