For a Profit-Maximizing Monopolistically Competitive Firm, Marginal Revenue Equals Marginal

question 438

Multiple Choice

For a profit-maximizing monopolistically competitive firm, marginal revenue equals marginal cost in

• A)the short run but not in the long run.
• B)the long run but not in the short run.
• C)both the short run and the long run.
• D)neither the short run nor the long run.

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Definitions:

Marginal Cost

The increase in cost that arises from an additional unit of production.

Average Variable Cost

The per unit cost of variable inputs (like labor and raw materials) that change with the level of output.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service, which typically varies with the level of production.

Total Costs

The sum of fixed and variable costs incurred by a business in the production of a good or service.