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

question 19

Multiple Choice

The figure below shows the revenue and cost curves of a monopolistically competitive firm.Figure: 12.2
In the figure,
D: Demand curve
MR: Marginal revenue curve
ATC₁ and ATC₂: Average total cost curves
MC: Marginal cost curve
-In the long-run, in a monopolistically competitive market:

• A)marginal revenue is greater than average revenue.
• B)price equals marginal cost.
• C)price equals minimum average total cost.
• D)the firms earn positive economic profits.
• E)resources are inefficiently allocated .

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Definitions:

Control Account

A general ledger account that summarizes the total amounts recorded in subsidiary ledgers for individual components, like accounts receivable or payable.

Special Journals

Accounting journals designed for recording a specific type of transaction in a detailed manner, such as sales or purchases.

General Journal

A bookkeeping journal where all types of financial transactions are initially recorded, before being transferred to specific accounts in the general ledger.

Closing Journal Entries

Entries made at the end of an accounting period to transfer balances from temporary to permanent accounts.