In Long-Run Equilibrium in a Monopolistically Competitive Market,firms Typically

question 119

Multiple Choice

In long-run equilibrium in a monopolistically competitive market,firms typically:

• A) earn a normal profit.
• B) charge a price equal to marginal cost.
• C) earn an above-normal profit.
• D) charge a price equal to marginal revenue.

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Definitions:

Effective Rate

The actual interest rate of an investment or loan, taking into account the effects of compounding.

Compounded Semi-Annually

Interest calculation method where the interest is added to the principal sum twice a year, causing the interest to earn interest.

Strip Bond

A type of bond where the principal and regular coupon payments have been separated and are sold individually as zero-coupon bonds.

Interest

The cost of borrowing money, typically expressed as a percentage of the borrowed amount, paid by the borrower to the lender.