-Refer to Figure 9

question 20

Multiple Choice

-Refer to Figure 9.4.In the long run,how much should the firm produce at the price P3?

• A) 0
• B) Q1
• C) Q2
• D) Q3

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Definitions:

Perfect Competition

A market structure characterized by many firms, freedom of entry and exit, homogeneous products, and perfect knowledge, leading to price taking behavior.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, leading to competition based on quality, price, and marketing.

Identical Cost Curves

A theoretical situation where firms in a market have the same costs of production for producing any level of output.

Profit-Maximizing Level

the output quantity at which a firm achieves the highest possible profit, where marginal revenue equals marginal cost.