Use the Figure Below to Answer the Following Questions

question 76

Multiple Choice

Use the figure below to answer the following questions.

Figure 14.2.2
-Refer to Figure 14.2.2. If this firm in monopolistic competition is maximizing economic profit,

• A)there will be entry of rival firms into the industry.
• B)rival firms will exit the industry.
• C)its profit will rise over time.
• D)this firm will exit the industry in the long run.
• E)it is in long-run equilibrium.

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Definitions:

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Sole Proprietorship

A business owned and operated by one individual, where there is no legal distinction between the owner and the business entity.

Competitor

A person or organization that is in the same industry or field and is in competition for the same market share.

Robinson-Patman Act

A 1936 U.S. law aimed at preventing anticompetitive practices by producers, specifically price discrimination.