Which of the Following Statements Regarding Monopolistic Competition Is False

question 182

Multiple Choice

Which of the following statements regarding monopolistic competition is false?

• A)In the long-run equilibrium, price equals average total cost.
• B)In the long-run equilibrium, firms earn zero economic profit.
• C)In the long-run equilibrium, firms charge a price above marginal cost.
• D)In the long-run equilibrium, firms produce a quantity in excess of their efficient scale.

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Definitions:

Demand for Labor

The total amount of workers that employers are willing and able to hire at a given wage rate in a specific labor market.

Supply of Labor

The total hours that workers are willing and able to work at a given wage rate.

Wages

Remuneration provided to laborers for their services, usually based on an hourly, daily, or task-completion method.

Total Compensation

The complete pay package for employees including all forms of money, benefits, services, and in-kind payments.