In the Long Run, If the Demand Curve of a Profit-Maximizing

question 187

Multiple Choice

In the long run, if the demand curve of a profit-maximizing monopolistically competitive firm is tangent to its average total cost curve, then

• A)the firm would break even.
• B)the firm would shut down temporarily.
• C)the firm would earn enough revenue to cover its variable costs, but not its fixed costs.
• D)the firm would earn an economic profit.

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Definitions:

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