Refer to the Above Graph

question 92

Multiple Choice

Refer to the above graph.It represents a monopolistically competitive firm in a constant-cost industry.In long-run equilibrium this firm will:

• A) continue to earn economic profits because it has monopolistic power to set its price.
• B) become a perfectly competitive firm because there are no significant barriers to entry.
• C) break even because average total cost (AT
• C)and marginal cost (M
• C)will increase as more firms enter the market.
• D) break even because its demand curve will fall and become more elastic as it loses sales to other firms entering the market.

---

Definitions:

Great Wealth

An abundance of valuable financial assets or physical possessions which surpasses the norm or average.

Achievement

The successful accomplishment of a task or goal, often recognized by some form of reward or acknowledgment.

David McClelland

A psychological theorist known for his work on motivation, particularly regarding the needs for achievement, power, and affiliation.

Three Types

A generic categorization term indicating that a particular subject or concept can be divided into three distinct categories.