The Table Below Summarizes the Information Possessed by a Firm

question 130

Multiple Choice

The table below summarizes the information possessed by a firm in a monopolistically competitive market. Quantity demanded is in thousands of units.

-Refer to the table above.This market is ________.

• A) in the long-run equilibrium, because the firm earns a maximum profit of zero
• B) in the long-run equilibrium, because the marginal revenue equals the marginal cost at the optimal quantity for the firm
• C) not in the long-run equilibrium, because the firm earns a maximum profit that is negative
• D) not in the long-run equilibrium, because the marginal revenue and the marginal cost are not equal

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Definitions:

Profit-Maximizing Price

The price at which a company can sell its product to achieve the maximum possible profit.

Perm

A chemical hair treatment used to add curls or waves to the hair, or the city located in the European part of Russia, known for its cultural and historical significance.

Economic Profits

The variance between total financial gains and total charges, taking into account both manifest and implied costs.

Long Run

A time frame during which all production elements and expenses can change, enabling complete adjustment within the industry to any alterations.