Suppose You Operate in a Monopolistically Competitive Market

question 202

Multiple Choice

Suppose you operate in a monopolistically competitive market. If you sell your good at a price of $10 and your average cost of production is $8

• A) your market is in long-run equilibrium.
• B) we can expect firms to enter your market and sell a similar good in the long run.
• C) there will be no incentive for competing firms to enter your market in the long run.
• D) you cannot be in short-run equilibrium.

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Definitions:

Process

A series of actions or steps taken in order to achieve a particular end.

Private Owner

An individual or entity that exclusively owns the rights to a property, business, or asset, without governmental sharing or interference.

Prohibited

Forbidden by law, rules, or other forms of authority.

Infringes

The act of violating, breaching, or encroaching upon laws, regulations, contracts, or the rights of others.