Which of the Following Describes the Relative Positions of the Demand

question 269

Multiple Choice

Which of the following describes the relative positions of the demand curve and the average total cost (ATC) curve of a monopolistically competitive firm that earns a profit in the short run?

• A)In the short run, the firm's demand curve will lie above its ATC curve. The demand curve will be tangent to the ATC curve in the long run.
• B)In the short run, the firm's demand curve will lie below its ATC curve. The demand curve will be tangent to the ATC curve in the long run.
• C)In the short run, the firm's demand curve will cross its ATC curve at the ATC curve's lowest point. The demand curve will be above the ATC curve in the long run.
• D)In the short run, the firm's ATC curve will cross the demand curve at the profit-maximizing level of output. The demand curve will be tangent to the ATC curve in the long run.

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Definitions:

Historical Determinism

A theory that suggests historical events are determined by existing conditions and processes rather than being influenced by individual actions or chance.

Unconscious

Part of the mind that contains thoughts, memories, and desires beyond the reach of conscious awareness, significantly influencing behavior and decisions.

Pathological

Pertaining to or caused by disease; describing behaviors or conditions that are extreme, abnormal, or harmful.

Unconscious Forces

The motivations, desires, or thoughts that influence an individual's behavior without their conscious awareness, often explored in psychoanalytic theory.