Which of the Following Is a Difference Between a Monopolistically

question 247

Multiple Choice

Which of the following is a difference between a monopolistically competitive market and a perfectly competitive market in the long run?

• A) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market earn positive economic profits in the long run.
• B) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market incur losses in the long run.
• C) Firms in a monopolistically competitive market charge a price higher than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.
• D) Firms in a monopolistically competitive market charge a price lower than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.

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Definitions:

Middle-Income DVCs

Developing countries that have achieved a certain level of GDP per capita, falling between low-income and high-income thresholds, if DVCs is taken to mean Developing Countries.

Farm Labor

The workforce engaged in agricultural activities, including planting, cultivating, and harvesting crops, as well as raising livestock.

Demographic Transition

The massive decline in birth rates that occurs once a developing country achieves higher standards of living because the perceived marginal cost of additional children begins to exceed the perceived marginal benefit.

Population Growth

The increase in the number of individuals in a population over a specific period.