Unlike a Perfectly Competitive Firm,a Monopolistically Competitive Firm

question 19

Multiple Choice

Unlike a perfectly competitive firm,a monopolistically competitive firm:

• A)makes zero economic profits in the short run.
• B)caters to a large portion of the market.
• C)does not face barriers to entry and exit.
• D)sells a differentiated product.

---

Definitions:

Consumer Surplus

The distinction in the total potential consumer payment for a good or service and their actual payment.

Surplus I

A situation where the quantity of a good or service supplied exceeds the quantity demanded, often leading to a price decrease.

Consumer Surplus

The disparity between consumers' theoretical expenditure on a good or service and their practical expenditure.

Total Surplus

The sum of consumer surplus and producer surplus, indicating the total benefits received by both producers and consumers in a market.