Suppose That a Profit-Maximising Firm in a Monopolistically Competitive Market

question 98

Multiple Choice

Suppose that a profit-maximising firm in a monopolistically competitive market is at long-run equilibrium, then:

• A) the demand curve will be unitary elastic
• B) average revenue will exceed the price
• C) price will exceed marginal cost
• D) marginal revenue exceeds marginal cost

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Definitions:

Profit-Maximizing

The process by which a firm determines the price and output level that returns the greatest profit.

Per-Bushel Profit

The financial gain earned by selling a bushel (a unit of measure for volume) of agricultural produce, after subtracting the cost of production.

Profits

The financial gain obtained when revenue from sales exceeds costs and expenses associated with operating a business.

Farmer

Someone who works in the agricultural sector, producing living items for nourishment or foundational substances.