The Figure Given Below Shows the Revenue and Cost Curves

question 69

Multiple Choice

The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Firms in monopolistically competitive markets spend significant sums on product differentiation because:

• A)it enables them to earn positive profits in the short run.
• B)it increases the elasticity of demand for a firm's product.
• C)it reduces the number of competitors.
• D)it causes the firm's supply curve to become horizontal so the firm can expand output indefinitely.
• E)it causes the firm's demand curve to become horizontal so that it can charge a fixed price for its product.

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Definitions:

Corporate Control

The governance and oversight mechanisms in place within corporations to direct and manage their operations.

Immaterial Labor

Labor that does not produce things per se but that produces the informational and cultural content of commodities.

Consumption-Based Economy

An economic system primarily driven by consumer spending on goods and services, with economic health measured by the level of consumption activity.

Donald Roy

An American sociologist known for his studies on industrial sociology and labor practices, particularly his work on "banana time" and informal workgroup culture.