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:

Digestive Enzymes

Proteins produced by the digestive system to break down foods into nutrients that can be absorbed by the body.

Lacteal

One of the many lymphatic vessels in the intestinal villi that absorb fat.

Lipid Digestion

The biochemical process of breaking down fats into fatty acids and glycerol in the digestive system for absorption and use by the body.

Gastrin

A hormone released by the stomach mucosa; stimulates the gastric glands to secrete pepsinogen.