Consider a Monopolistically Competitive Firm in a Market in Long-Run

question 214

Multiple Choice

Consider a monopolistically competitive firm in a market in long-run equilibrium. This firm is likely earning

• A)a positive economic profit since it is charging a price above marginal cost.
• B)no economic profit since it is charging a price equal to its marginal cost.
• C)a positive economic profit since it is charging a price above its average total cost.
• D)no economic profit since it is charging a price equal to it average total cost.

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Definitions:

Compounded Monthly

The calculation of interest that adds the earned interest back to the principal sum each month, resulting in interest earnings on interest.

Population Growth

The increase in the number of individuals in a population, usually measured over a specific period and influenced by factors such as birth rates, death rates, and migration.

Expected Population

An estimation of a population size in the future based on current trends and changes.

GIC

Guaranteed Investment Certificate, a type of Canadian investment that offers a guaranteed rate of return over a fixed period.