For a Profit-Maximizing Monopolistically Competitive Firm,how Does Price Compare with Marginal

question 41

Multiple Choice

For a profit-maximizing monopolistically competitive firm,how does price compare with marginal cost

• A)In the short run, price exceeds marginal cost, but in the long run, price equals marginal cost.
• B)In the short run, price equals marginal cost, but in the long run, price exceeds marginal cost.
• C)In both the short run and the long run, price exceeds marginal cost.
• D)In both the short run and the long run, price equals marginal cost.

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Definitions:

FIFO

An inventory valuation method that assumes that the first items placed into inventory are the first sold.

Purchase Costs

The total expense incurred to acquire goods or services, including the product price and additional charges related to acquisition.

Obsolete Goods

Items that are no longer useful or saleable due to changes in technology, style, or customer preferences, often leading to inventory write-offs.

Original Cost

The initial cost of acquiring an asset or service, including all expenses related to the purchase.