Exhibit 9-2 a Monopolistic Competitive Firm

question 69

Multiple Choice

Exhibit 9-2 A monopolistic competitive firm

Comparing the monopolistically competitive firm in Exhibit 9-2 to the long-run profit-maximizing outcome for a perfectly competitive firm with a price of $15 per unit and a quantity of 600,

• A) the quantity produced by the monopolistically competitive firm is higher than that of the perfectly competitive firm.
• B) the profit earned by the monopolistically competitive firm is higher than that of the perfectly competitive firm.
• C) the marginal revenue of the monopolistically competitive firm is lower than that of the perfectly competitive firm at the profit-maximizing quantity.
• D) the long run average cost of the monopolistically competitive firm is higher than that of the perfectly competitive firm at the profit-maximizing quantity.

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Definitions:

Entorhinal Cortex

A cortex located in the medial temporal lobe that functions as a hub in a widespread network for memory, navigation, and the perception of time.

Orbitofrontal Cortex

The part of the frontal lobe situated above the orbits or eye sockets, involved in decision making and processing of rewards and punishments.

Head Direction Cells

Neurons found in several brain regions that increase their firing rates when an animal's head points in a specific direction, helping to navigate its surroundings.