Which of the Following Conditions Is Characteristic of a Monopolistically

question 633

Multiple Choice

Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?

• A)P > ATC
• B)P = ATC
• C)P < ATC
• D)Any of the above could be correct.

---

Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, remaining constant over a period.

Per Unit Basis

A method of quantifying costs, revenues, or other financial metrics on the basis of a single unit of production or service.

Activity

A specific task or action that is part of a process or contributes to the completion of a project.

Variable Costs

Expenditures that fluctuate directly in relation to the amount of goods or services produced.