Which Situation Is Least Likely to Apply to a Monopolistically

question 111

Multiple Choice

Which situation is least likely to apply to a monopolistically competitive firm

• A)Profit is positive in the short run.
• B)Total cost exceeds total revenue in the short run.
• C)Profit is positive in the long run.
• D)Total revenue equals total cost in the long run.

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the average cost per unit of output decreases with increasing scale.

Per-unit Cost

The cost incurred for producing a single unit of a product, which is calculated by dividing the total cost of production by the total number of units produced.

Monopolistic Firm

A company that has exclusive control over a particular market or industry, limiting competition.

Government Regulation

Rules set by the government to control the way businesses can operate within an economy.