If Price Is Less Than Average Cost in a Monopolistically

question 352

Multiple Choice

If price is less than average cost in a monopolistically competitive market

• A) there is an incentive for firms to exit the market.
• B) there is profit incentive for firms to enter the market.
• C) the market must be in long-run equilibrium.
• D) there is no incentive for the number of firms in the market to change.

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Definitions:

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Use-of-force

The application of physical coercion by law enforcement officers, or others in authority, to gain compliance from persons unwilling to obey commands, or to protect themselves or others from harm.

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Predator Principle

A concept in ecological or social systems where dominant entities exploit or consume resources at the expense of others, maintaining balance or hierarchy.