The Entry and Exit of Firms in a Monopolistically Competitive

question 163

Multiple Choice

The entry and exit of firms in a monopolistically competitive market guarantee that

• A) marginal revenue equals marginal cost, and average total cost is minimised.
• B) firms can earn economic profits in the long run.
• C) price equals average total cost in the long run.
• D) firms can earn economic profits in the short run.

---

Definitions:

Attributes

Characteristics or qualities that define or differentiate objects, individuals, or data points.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used as a tool in investment and financial analysis.

IRR Function

Internal Rate of Return function; a financial formula used in capital budgeting to estimate the profitability of potential investments.

Spreadsheet

A digital document that allows users to organize, analyze, and store data in rows and columns.