Which of the Following Statements Is Correct

question 229

Multiple Choice

Which of the following statements is correct?

• A) Firms in monopolistic competition and monopoly can earn economic profits in both the short run and the long run.
• B) Both perfectly competitive and monopolistically competitive firms are price takers.
• C) Both a monopolistically competitive industry and a monopoly are characterized by a very small number (or one)firm.
• D) Firms can easily enter a perfectly competitive or monopolistically competitive industry.

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Definitions:

Shut Down

A short-term decision by a firm to cease production due to unfavorable market conditions, without permanently exiting the market.

Total Cost

A rephrased definition: The aggregate expenditure associated with the manufacture or delivery of products or services, encompassing variable, fixed, and any additional costs.

TVC

Total Variable Cost, the total of all costs that vary with the level of output.

Total Revenue

The entire amount of income generated by the sale of goods or services related to a company's primary operations.