Exhibit 9-2 a Monopolistic Competitive Firm

question 9

Multiple Choice

Exhibit 9-2 A monopolistic competitive firm

Comparing the firms in a monopolistic competitive industry shown in Exhibit 9-2 to a perfectly competitive firm in long-run equilibrium, we find that both firms

• A) choose a price equal to the marginal cost at the profit-maximizing quantity.
• B) will experience entry of new firms into the industry.
• C) earn zero economic profits.
• D) minimize cost per unit at their profit-maximizing quantity.

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Definitions:

Consciously Choosing

The act of making deliberate and aware decisions regarding purchases or other life choices.

Subjectively Selecting

The process of choosing or making decisions based on personal feelings, tastes, or opinions rather than external evidence or criteria.

Subconsciously Selecting

The process by which individuals make choices or decisions without conscious awareness.

Marketing Audit

A comprehensive, systematic, and periodic evaluation of a company's marketing strategies, objectives, and activities.