Which of the Following Describes the Relative Positions of the Demand

question 156

Multiple Choice

Which of the following describes the relative positions of the demand curve and the average total cost (ATC) curve of a monopolistically competitive firm that earns a profit in the short run?

• A)In the short run, the firm's demand curve will lie above its ATC curve.The demand curve will be tangent to the ATC curve in the long run.
• B)In the short run, the firm's demand curve will lie below its ATC curve.The demand curve will be tangent to the ATC curve in the long run.
• C)In the short run, the firm's demand curve will cross its ATC curve at the ATC curve's lowest point.The demand curve will be above the ATC curve in the long run.
• D)In the short run, the firm's ATC curve will cross the demand curve at the profit maximising level of output.The demand curve will be tangent to the ATC curve in the long run.

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Definitions:

Learning Organizations

Entities that consciously cultivate a culture of continuous improvement and adaptability by encouraging the acquisition and sharing of knowledge.

Innovation Teams

Groups within an organization tasked with developing new ideas, solutions, or products to enhance the company's offerings or processes.

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Individuals or groups who act as catalysts for change within an organization, driving and facilitating the change process.

Benchmarking

The process of comparing one's business processes and performance metrics to industry bests or best practices from other industries.