The Theory of Monopolistic Competition Predicts That in Long-Run Equilibrium

question 7

Multiple Choice

The theory of monopolistic competition predicts that in long-run equilibrium a monopolistically competitive firm will:

• A) produce the output level at which price equals long-run marginal cost.
• B) operate at minimum long-run average cost.
• C) overutilize its insufficient capacity.
• D) produce the output level at which price equals long-run average cost.

---

Definitions:

Reach

The total number of different people or households exposed to an advertising campaign, message, or channel over a specific period.

Advertising Appeal

The underlying theme or idea used in an advertising campaign to attract the target audience’s interest and persuade them.

GEICO

is an American auto insurance company that offers a wide range of personal insurance products. GEICO is known for its distinctive advertising and commitment to customer service.

Bebe

A fashion brand known for its contemporary women's clothing, accessories, and fragrance products.