Which Two Curves Are Tangent to One Another in a Monopolistically

question 117

Multiple Choice

Which two curves are tangent to one another in a monopolistically competitive market with zero economic profit

• A)demand and average variable cost
• B)demand and average total cost
• C)marginal revenue and average variable cost
• D)marginal revenue and average total cost

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Definitions:

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee but does not have full control.

Carrying Value

The book value of an asset or liability on a company's balance sheet, calculated as the asset's original cost minus accumulated depreciation, amortization, or impairment charges.

Investment Income

Income earned from investments such as dividends on stocks, interest on bonds, or rental income from property.

Equity Method

The equity method is an accounting technique used for recording investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the investing company’s share of the investee’s profits or losses.