In the Long Run, Firms in Both Monopolistically Competitive Markets

question 155

Multiple Choice

In the long run, firms in both monopolistically competitive markets and perfectly competitive markets earn zero economic profits, but unlike perfectly competitive firms in the long run, monopolistically competitive firms

• A)charge a price that is greater than average revenue.
• B)charge a price that is equal to marginal cost.
• C)do not produce at minimum average total cost.
• D)charge a price that is equal to average total cost.

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Definitions:

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead.

Purchase of Raw Materials

The acquisition of the basic materials required for the production of goods or delivery of services.

Work in Process Inventory

The account that tracks the costs associated with partially completed goods that are still in the process of being manufactured.

Unadjusted Cost of Goods Sold

Unadjusted Cost of Goods Sold (COGS) is the initial calculation of all costs directly associated with the production of goods before any adjustments for inventory changes or other factors.