Table 101 -Refer to Table 10

question 37

Multiple Choice

Table 10.1
$$\begin{array} { c c c } \mathrm { Q } & \mathrm { P } ( \$ ) & \mathrm { TC } ( \$ ) \\\hline 1 & 27 & 10 \\2 & 24 & 17 \\3 & 21 & 32 \\4 & 18 & 47 \\5 & 15 & 67\end{array}$$
-Refer to Table 10.1,which shows the output,price,and total cost for a monopolistic competitor.At the profit-maximizing output,the monopolistically competitive firm is in _____

• A)long-run equilibrium, and price equals average total cost.
• B)long-run equilibrium, and price is less than average total cost.
• C)short-run equilibrium, and price is greater than average total cost.
• D)short-run equilibrium, and incurs an economic loss.
• E)short-run equilibrium, and there is zero economic profit.

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Definitions:

Income

The financial gain (earned or unearned) accruing over a given period of time.

Federal Excise Tax

A tax imposed by the federal government on the sale of specific goods and services, such as tobacco and alcohol.

Benefits-received Principle

A taxation theory suggesting that individuals should pay taxes in proportion to the benefits they receive from government services.

Taxation

A process by which governments finance their expenditure by imposing charges on citizens and corporate entities.