A Monopolistically Competitive Firm Is Currently Earning a Positive Economic

question 407

Multiple Choice

A monopolistically competitive firm is currently earning a positive economic profit. If other firms enter the market, we would expect that the added competition will cause this firm to adjust its output such that it

• A)will operate closer to its efficient scale.
• B)will operate further from its efficient scale.
• C)will no longer be at its efficient scale.
• D)might move either closer to or further from its efficient scale.

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Definitions:

Factory Worker

An individual employed in a manufacturing facility or plant, responsible for operating machinery, assembling products, or processing goods.

Family Wage

Idea that male workers should earn a wage sufficient to enable them to support their entire family without their wives’ having to work outside the home.

Male Head

The concept often associated with traditional family structures, referring to a male family member, usually the father or husband, serving as the primary authority figure and provider.

Domestic Servants

Individuals employed within a home to perform household chores and duties.