At the Level of Output Where the Marginal Cost and Marginal

question 12

Multiple Choice

At the level of output where the marginal cost and marginal revenue curves intersect, two firms demand curves pass above their average total cost curve. One firms is a monopoly and the other is perfectly competitive. Which statement is true for both firms?

• A) The firms are making an economic profit.
• B) Price equals marginal revenue.
• C) Price equals marginal cost.
• D) Entry of new firms is expected in the market.

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