Is a Monopolistically Competitive Firm Allocatively Efficient

question 216

Multiple Choice

Is a monopolistically competitive firm allocatively efficient?

• A)No, because it does not produce at minimum average total cost.
• B)Yes, because it produces where marginal cost equals marginal revenue.
• C)No, because price is greater than marginal cost.
• D)Yes, because price equals average total cost.

---

Definitions:

Componential

Relating to the components or elements of something; in psychology, it often refers to Sternberg's componential analysis of intelligence, one aspect of his triarchic theory.

Promotions

Activities or strategies designed to increase the visibility, sales, or position of a product, service, or individual within a market or organization.

Tacit Knowledge

Knowledge that is difficult to transfer to another person by writing it down or verbalizing it, often gained through personal experience and context.

Componential Intelligence

A component of Sternberg's triarchic theory of intelligence that entails analytical tasks, such as problem-solving and logical reasoning.