In the Long Run in Monopolistic Competition

question 49

Multiple Choice

In the long run in monopolistic competition,

• A) economic profits are zero.
• B) P = MC.
• C) P = minimum ATC.
• D) firms have an incentive to leave.
• E) the demand curve is tangent to the MC curve.

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Definitions:

Foreign Currency

Currency used in a country other than one’s own, reflecting the economic practices and transactions in foreign nations.

Zero Sum Game

A situation in game theory where one participant's gains or losses are exactly balanced by the losses or gains of the other participants.

Options Contracts

Options contracts are agreements between two parties to buy or sell an asset at a predetermined price on or before a specific date.

Speculator

An individual or entity that engages in the buying and selling of financial instruments or assets for short-term profit, taking on higher risk.