The More Elastic a Monopolistic Competitor's Long-Run Demand Curve,the

question 27

Multiple Choice

The more elastic a monopolistic competitor's long-run demand curve,the:

• A) greater its excess capacity.
• B) higher its price relative to that of a pure competitor having the same cost curves.
• C) lower its long-run profit.
• D) lower its average total cost at its profit-maximizing level of output.

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Definitions:

Marginal Revenue Curve

A graphical representation showing how much additional revenue a firm will generate by selling one more unit of a product or service.

Marginal Revenue

The extra income a business earns by selling an additional unit of a product or service.

Profit-Maximizing

The process or strategy aimed at achieving the highest possible profit from products or services.

Loss-Minimizing

A strategy or approach aimed at reducing losses in business operations to the lowest possible level.