The Figure Given Below Shows Revenue and Cost Curves of a Monopolistically

question 18

Multiple Choice

The figure given below shows revenue and cost curves of a monopolistically competitive firm.Figure: 12.1
In the figure,
MR: Marginal revenue curve
ATC: Average total cost curve
AVC: Average variable cost curve
MC: Marginal cost curve
-According to Figure 12.1, the firm:

• A)will shut down temporarily at any price below A.
• B)will operate at a price below A, as long as it is greater than marginal cost.
• C)will shut down at a price below A only in the long run.
• D)will break-even at the price level C.
• E)will shut down if the price falls below E.

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Definitions:

Dollar Depreciates

A decrease in the value of the U.S. dollar relative to other currencies in the foreign exchange market, making foreign goods more expensive and U.S. exports cheaper.

Gold Standard

A monetary system in which the value of a currency is directly linked to a specified amount of gold, allowing currency to be exchanged for gold at the fixed rate.

Trade Deficit

An economic condition where a country's imports exceed its exports over a certain period, leading to negative net exports.

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much of one currency can be exchanged for another currency.