Compared to a Perfectly Competitive Firm, the Demand Curve Facing

question 224

Multiple Choice

Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is

• A)more elastic because there are many close substitutes for the product of a monopolistically competitive firm.
• B)less elastic because monopolistically competitive firms produce similar, but not identical, products.
• C)just as elastic because there are many sellers in both markets.
• D)more elastic because in the long run, the demand curve is tangent to the firm's average total cost curve.

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Definitions:

Stable Ecosystems

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Greenhouse Effect

The trapping of the sun's warmth in the planet's lower atmosphere due to the greater transparency of the atmosphere to visible radiation from the sun than to infrared radiation emitted from the planet's surface.

Ozone Layer

A stratospheric layer of ozone molecules that absorbs and reduces the amount of ultraviolet radiation reaching the Earth's surface.

Atmospheric Gases

The gases that compose Earth's atmosphere, including nitrogen, oxygen, carbon dioxide, and trace gases, which play a crucial role in supporting life and influencing climate.