When a Monopolistically Competitive Firm Is Maximizing Its Profit

question 21

Multiple Choice

When a monopolistically competitive firm is maximizing its profit:

• A)marginal revenue is also maximized.
• B)average revenue exceeds marginal revenue.
• C)total revenue declines to zero.
• D)marginal revenue equals average revenue.

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Definitions:

Liquidating Dividend

A type of payment made by a corporation to its shareholders during its liquidation or dissolution, often representing the return of capital rather than profit.

Special Dividend

A one-time payment made by a company to its shareholders, often issued in response to exceptionally strong earnings or when a large amount of excess cash is on hand.