A Firm in Monopolistic Competition Is Similar to a Firm

question 163

Multiple Choice

A firm in monopolistic competition is similar to a firm in perfect competition because they both

• A) can make only zero economic profit in the long run.
• B) can make only zero economic profit in the short run.
• C) maximize their profits by producing where P = MR = MC.
• D) Both answers A and C are correct.
• E) Both answers B and C are correct.

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Definitions:

Erogenous Zone

An area of the human body that has heightened sensitivity, the stimulation of which may generate a sexual response, including sexual arousal and the production of sexual pleasure.

Stages of Development

The theory that human growth and development occur in distinct phases, each characterized by specific psychological and physical features.

Freud

Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, known for his theories on the unconscious mind, defense mechanisms, and sexuality.

Fixation

In psychoanalytic theory, an obsessive interest or feeling stuck at a particular stage of psychosexual development.