Which of the Following Statements Is True

question 66

Multiple Choice

Which of the following statements is true?

• A) The marginal entrant in a market earns the highest profit.
• B) The marginal entrant has the lowest cost among all the firms in a market.
• C) Differences in technology and experience can lead to firms having different costs even under perfect competition.
• D) In a market that has identical cost structures for all firms, there is a possibility of positive economic profits in both the short run and the long run.

Grasp the concept and consequences of perfect price discrimination on consumer surplus and market efficiency.

Comprehend the market dynamics and adjustments in response to profits and losses within monopolistic competition.

Understand the definition and characteristics of monopoly in comparison to perfect competition.

Identify and explain the reasons behind economies of scale and diseconomies of scale.

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Definitions:

Histogram

Graph that uses vertical bars to represent the frequencies of a set of variables. The measured values found within the distribution are listed on the horizontal axis (x-axis) and frequency counts are placed on the vertical axis (y-axis).

Bar Graph

A chart that represents categorical data with rectangular bars with lengths proportional to the values they represent.

Frequency Polygon

Variation of a histogram where rather than a series of vertical bars, a line is drawn to connect the midpoint for each of the different measured variables in the distribution.

Central Tendency

A statistical measure that indicates the center or the middle of the distribution.