Which of the Following Statements Is Not Correct

question 421

Multiple Choice

Which of the following statements is not correct?

• A) Firms in monopolistic competition and monopoly can earn economic profits in the short run.
• B) Firms in monopolistic competition and perfect competition produce the welfare-maximizing level of output.
• C) Monopolistically competitive firms price above marginal cost, whereas competitive firms price at marginal cost.
• D) Firms wishing to enter a monopolistically competitive market can do so freely, whereas firms wishing to enter a monopoly market will face barriers.

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Definitions:

Firm's Output

The total quantity of goods or services produced by a company within a specific time period.

Lowest Price

The minimum cost at which a good or service is offered in the market, representing the least amount a seller is willing to accept.

Long Run

refers to a period of time in which all factors of production and costs can be fully adjusted, including all forms of investment.

Short Run

A timeframe in economic terms where firms can adjust production levels only by changing variable inputs, with fixed inputs remaining constant.