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:

Present Obligation

An existing duty or responsibility that an entity is required to fulfill in the future.

PVIF

Present Value Interest Factor, a factor used to calculate the present value of a sum of money to be received in the future.

Present Value Factors

Numerical factors used in the calculation of the present value of future cash flows, considering the time value of money.

Bond Premium

The amount by which the market price of a bond exceeds its par value, typically occurring when the bond's interest rate is higher than current market rates.