Which of the Following Is FALSE Regarding the Long Run

question 292

Multiple Choice

Which of the following is FALSE regarding the long run for a firm in monopolistic competition?

• A) The firm's economic profit equals zero.
• B) Marginal cost equals average total cost.
• C) Price exceeds marginal cost.
• D) Price equals average total cost.

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Definitions:

Economic Profit

The economic result derived from subtracting a business's entire expenses, both explicit and implicit, from its total incoming funds.

Product Price

The amount of money required to purchase a good or service, determined by factors like production cost, market demand, and competition.

Optimal Output

The level of production at which a company can achieve the highest possible profit, balancing costs and revenues effectively.

Normal Profit

Normal profit is the minimum level of earnings necessary for a company to remain competitive in the market, covering its opportunity costs.