Which of the Following Statements Best Describes the Price, Output

question 79

Multiple Choice

Which of the following statements best describes the price, output and profit conditions of monopolistic competition?

• A) Price will equal marginal cost at the profit-maximising level of output; and profits will be positive in the long run.
• B) Price will always equal average variable cost in the short run and either profits or losses may result in the long run.
• C) Marginal revenue will equal marginal cost in the short run, profit-maximising level of output; and in the long run, economic profit will be zero.
• D) Marginal revenue will equal average total cost in the short run; and long-run economic profits will be zero.

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Definitions:

File Transfer Protocol (FTP)

A protocol used to upload and download files from one computer to another over the Internet.

E-mail Messages

Digital messages sent electronically from one user to another over a network, primarily using the Internet.

Client/server Model

An architecture dividing applications into two roles: clients request services, and servers provide services, supporting networked, application service requests.

TCP

Transmission Control Protocol, a fundamental protocol in the Internet protocol suite that enables reliable, ordered, and error-checked delivery of a stream of bytes between applications running on hosts communicating via an IP network.