The Graph Depicts a Monopolistically Competitive Firm

question 71

Multiple Choice

The graph depicts a monopolistically competitive firm. This monopolistically competitive firm is earning economic profits in the short run and

• A) will continue to have economic profits in the long run.
• B) will earn only normal profits in the long run.
• C) this will cause its demand curve to shift to the right in the long run.
• D) this will cause its cost curves to rise in the long run.

---

Definitions:

Contagion Theory

One of the earliest theories of collective action; suggests that individuals who join a crowd can become “infected” by a mob mentality and lose the ability to reason.

Collective Behavior

Behavior that follows from the formation of a group or crowd of people who take action together toward a shared goal.

Large Numbers

Numerical values that are significantly larger than those ordinarily encountered in daily life or in specific contexts, often requiring special methods for understanding or computation.

Social Revolutions

Significant, rapid, and often violent changes in society's structures, particularly those related to political power and class structures.