A Monopolistically Competitive Firm in the Long Run Will

question 139

Multiple Choice

A monopolistically competitive firm in the long run will

• A)have a demand curve tangent to its AC.
• B)have a demand curve below its AC.
• C)have a demand curve above its AC.
• D)operate where excessive profit can be achieved.

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Definitions:

Average Product

The output produced per unit of input, calculated by dividing total output by the number of units of input.

Law Of Diminishing Marginal Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant.

Total Output

The overall quantity of goods and services produced in an economy within a specific time frame.

Units Of Input

Quantitative measures of the resources used in the production of goods or services.