Which of the Following Statements Best Describes the Price,output,and Profit

question 87

Multiple Choice

Which of the following statements best describes the price,output,and profit conditions of monopolistic competition?

• A) Price will equal marginal cost at the profit-maximizing level of output,and profits will be positive in the long run.
• B) Price will always equal average variable cost in the short run,and either profits or losses may result in the long run.
• C) Marginal revenue will equal marginal cost in the short run at a profit-maximizing level of output; in the long run,economic profit will be zero.
• D) Marginal revenue will equal average total cost in the short run,and long-run economic profits are generally positive but could be zero.
• E) Output is equal to the amount for which marginal revenue equals price.