Long-Run Equilibrium Under Monopolistic Competition Requires That

question 119

Multiple Choice

Long-run equilibrium under monopolistic competition requires that

• A)the demand curve intersect the average cost curve.
• B)the demand curve be tangent to the average cost curve.
• C)price be equal to marginal cost.
• D)quantity produced be at the point where average cost is at a minimum.

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Definitions:

Correlation

The tendency of two variables to move together.

Two-asset Portfolio

It is a financial portfolio comprising two different assets, aimed at diversifying investment risk.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

CAPM

Capital Asset Pricing Model, a formula used to determine the expected return on an investment based on its risk relative to the market.