Long-Run Equilibrium Under Monopolistic Competition Is Similar to That Under

question 10

Multiple Choice

Long-run equilibrium under monopolistic competition is similar to that under perfect competition in that

• A)firms produce at the minimum point of their average cost curves.
• B)price equals marginal cost.
• C)firms earn normal profits.
• D)price equals marginal revenue.

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Definitions:

Slope-intercept Form

A way of writing the equation of a straight line in the form y = mx + b, where m is the slope and b is the y-intercept.

Slope

A measure of the steepness or the inclination of a line, defined as the ratio of the vertical change to the horizontal change.

Sales Price

The amount for which a product is sold to the customer, excluding any discounts or taxes.

List Price

The suggested retail price of a product set by the manufacturer, before any discounts or promotions.