If There Are a Large Number of Firms in a Monopolistically

question 61

Multiple Choice

If there are a large number of firms in a monopolistically competitive industry

• A) long-run profit will be equal to zero.
• B) the country in which the firms are located can be expected to export the goods they produce.
• C) there will be barriers to entry that prevent addition firms from entering the industry.
• D) the firms will converge production on a standardized product.
• E) there will be a small number of firms that are very large and the rest will be very small.

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Definitions:

Unfavorable Differences

Variances that occur when actual costs are higher than the budgeted or standard costs, often considered as negative variances.

Relevant Range

The range of the activity index over which the company expects to operate during the year.

Total Costs

The aggregate amount of all expenses incurred in the production of goods or services, including fixed and variable costs.

Linear

A mathematical relationship or function that can be graphically represented by a straight line, characterized by consistent changes.