When a Monopolistically Competitive Industry Is in Long-Run Equilibrium,the Excess

question 7

Multiple Choice

When a monopolistically competitive industry is in long-run equilibrium,the excess capacity in an individual firm is indicated by the difference between

• A)price and marginal cost.
• B)the output at which ATC is at a minimum and the output at which price equals marginal cost.
• C)zero and the output at which the demand curve is tangent to the ATC curve.
• D)price and average cost.
• E)the output at which ATC is at a minimum and the output at which marginal revenue is equal to marginal cost.

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Definitions:

B2B Markets

Encompasses the transaction of goods and services between businesses rather than between businesses and consumers.

Personal Selling

A promotional strategy where sales representatives interact directly with potential customers to explain product benefits and persuade them to make a purchase.

Advertising

The activity or profession of producing advertisements for commercial products or services to inform or attract potential customers.

Informational Appeal

Used in a promotion to help consumers make purchase decisions by offering factual information and strong arguments built around relevant issues that encourage them to evaluate the brand favorably on the basis of the key benefits it provides.