A Monopolistically Competitive Firm Is Considered to Have Excess Capacity

question 56

Multiple Choice

A monopolistically competitive firm is considered to have excess capacity because it:

• A)does not operate at the minimum point on its long-run average cost curve.
• B)does not operate at the minimum point on its marginal cost curve.
• C)operates at the point where average cost is greater than average revenue.
• D)operates at the point where marginal cost is above average revenue.

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Definitions:

Trochlear Nerve

Cranial nerve IV, to the muscle (superior oblique) turning around a pulley.

Occipital Lobe

The region of the brain located at the back of the head, responsible for processing visual information.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It controls the basic emotions (fear, pleasure, anger) and drives (hunger, sex, dominance, care of offspring).

Satisfaction

The feeling of pleasure or contentment resulting from the fulfillment of a desire, need, or expectation.