Which of the Following Statements Is True

question 108

Multiple Choice

Which of the following statements is true?

• A)The marginal revenue of a monopolistically competitive firm will be positive at high prices and negative at low prices.
• B)Because the demand curve for a monopolistically competitive firm is downward-sloping, its marginal revenue will be negative.
• C)The marginal revenue of a monopolistically competitive firm will be always be positive.
• D)The marginal revenue of a monopolistically competitive firm will be positive at low prices and negative at high prices.

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Definitions:

Average Cost

The total cost of production divided by the quantity produced, used to determine the efficiency and profitability of production.

Competitive Firm

A company operating in a market where it must compete against others for the same customers or resources, characterized by its efforts to offer better products, prices, or services.

Inelastic Demand

Characterized by a consumer's lack of sensitivity to price changes, resulting in minimal changes in quantity demanded despite fluctuations in price.

Competitive Industry

An industry characterized by numerous firms, where no single firm can dictate the price of goods or services.