If a Monopolistically Competitive Firm Has a Demand Curve That

question 40

Multiple Choice

If a monopolistically competitive firm has a demand curve that is shifting left,it must be true that:

• A)it is currently earning positive economic profits.
• B)firms are entering the market.
• C)the selling price of the good is decreasing.
• D)All of these statements are true.

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Definitions:

ATC Curve

Average Total Cost Curve; a graph that shows the per-unit cost of production at every level of output.

AVC Curve

Average Variable Cost Curve, it represents the change in variable cost associated with producing more units of a good or service.

Variable Input

An input in the production process that can be altered in the short term to adjust the level of output.

Output

Output is the total amount of goods and services produced by an economy or business over a set period, quantifying productivity and economic activity.