Examining the Cost,revenue,and Demand Curves for a Monopolistic Competitor Reveals

question 14

Multiple Choice

Examining the cost,revenue,and demand curves for a monopolistic competitor reveals that,at optimal output,the demand curve lies above the average total cost curve.Which of the following is true?

• A) There is economic profit in the long run.
• B) There is an economic loss in the long run.
• C) Firms will enter the industry in the long run.
• D) Firms will exit the industry in the long run.
• E) There is not enough information because demand is an imperfect benchmark for measuring profitability.

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