If a Monopolistically Competitive Firm Can Increase Its Level of Production

question 367

Multiple Choice

If a monopolistically competitive firm can increase its level of production and lower its average total cost of production at the same time then

• A)the firm has a product-variety opportunity.
• B)the firm has excess capacity.
• C)the firm has a business-stealing opportunity.
• D)the firm is producing a quantity of output higher than its efficient scale of production.

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Definitions:

Endometriosis

A painful disorder in which tissue similar to the tissue that normally lines the inside of your uterus grows outside your uterus.

Ductus Arteriosus

The connection in the fetus between the pulmonary trunk and the aorta.

Foramen Ovale

A hole in the fetal heart between the right atrium and the left atrium.

Pulmonary Trunk

A large artery that branches into the pulmonary arteries and carries blood to the lungs.