When a Monopolistically Competitive Firm Is in Long-Run Equilibrium

question 85

Multiple Choice

When a monopolistically competitive firm is in long-run equilibrium,

• A) production takes place where ATC is minimized.
• B) marginal revenue equals marginal cost and price equals average total cost.
• C) normal profit is zero and price equals marginal cost.
• D) economic profit is zero and price equals marginal cost.

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Definitions:

Issuance Price

The price at which a company's securities are made available for sale when they are first offered to the public.

Carrying Amount

The book value of an asset as recorded in an entity's financial statements, calculated as the original cost minus accumulated depreciation or amortization.

Bonds Issued

A financial instrument representing a loan made by an investor to a borrower, typically corporate or governmental, where the issuer commits to paying back the principal along with interest at a specified future date.

Straight-Line Method

A depreciation method that allocates an equal amount of the cost of an asset to each year of its useful life.