In the Long Run in a Monopolistic Competitive Industry

question 64

Multiple Choice

In the long run in a monopolistic competitive industry,

• A) economic profits will be positive.
• B) price will be driven to zero.
• C) the firm will not operate where MR = MC.
• D) economic profit will be zero.
• E) price will exceed average cost.

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Definitions:

Hypotheses Testing

Involves making inferences about a population based on sample data, typically by rejecting or failing to reject a null hypothesis.

Normal Approximation

A method that uses the normal distribution to approximate the distribution of other statistical measures when the conditions justify its use, particularly when the sample size is large.

Population Proportions

represent the fraction or percentage of individuals in a population exhibiting a certain trait or characteristic.

Binomial Distribution

A probability distribution that describes the number of successes in a fixed number of independent experiments, each with the same probability of success.