The Two Basic Conditions for Long-Run Equilibrium in Monopolistically Competitive

question 68

Multiple Choice

The two basic conditions for long-run equilibrium in monopolistically competitive markets are that

• A) all firms maximize profits and that economic profits are zero.
• B) price exceeds average cost for all firms and that they have no additional production capacity.
• C) firms constantly enter and leave the market because of the existence of economic profits.
• D) all firms cover their average variable costs and that marginal revenue equals total revenue.
• E) all firms maximize output while minimizing unit costs.

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Definitions:

Curare

Curare is a poison used primarily in South America, derived from plant extracts, and known for its muscle-paralyzing effects, historically employed on arrows or blow darts for hunting.

Sensitization

Learned behavior in which the response to a stimulus strengthens with repeated presentations.

Drug Use

The act of consuming substances for medical or recreational purposes, which can impact health and behavior.

Metabolic Tolerance

A situation where repeated exposure to a substance diminishes the effect of that substance by accelerating the body's metabolism, requiring higher doses for the same effect.