In the Long Run

question 490

Multiple Choice

In the long run,

• A)monopolistically competitive firms earn a higher profit than perfectly competitive firms because monopolistically competitive firms have some monopoly power.
• B)monopolistically competitive firms produce a higher output than perfectly competitive firms because competition drives the perfectly competitive firms' output down.
• C)both monopolistically competitive and perfectly competitive firms produce where P = MC.
• D)both monopolistically competitive and perfectly competitive firms produce where P = ATC.

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Definitions:

Trading Blocs

Groups of countries that have formed international agreements to enhance trade among themselves through the reduction of tariffs and common regulations.

West European

Pertaining to the countries located in the western part of Europe, often characterized by shared historical, cultural, and political experiences.

North American

Of or relating to the continent that includes Canada, the United States, Mexico, and the countries of Central America.

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, transforming agriculture-based societies into industrialized and urban ones.