Suppose a Monopolistically Competitive Firm Is in Long-Run Equilibrium

question 90

Multiple Choice

Suppose a monopolistically competitive firm is in long-run equilibrium. The firm's demand curve is tangent to its average cost curve at Q = 25. Average cost is minimized at Q = 35, where average cost is $50. Which of the following is true?​

• A)This firm maximizes profit at an output level of 25 units.
• B)This firm maximizes profit at an output level of 35 units.
• C)This firm maximizes profit at an output level less than 25 units.
• D)This firm maximizes profit at an output level greater than 35 units.
• E)This firm incurs economic loss in the long run.

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Definitions:

Collective Identity

A sense of belonging and shared characteristics with a group, distinguishing members from other groups.

Individual Interests

The personal goals, desires, or needs that a person aims to achieve or satisfy.

Simulated

An artificial representation or imitation of a real-world process, environment, or system, often used for training, analysis, or research purposes.

Complexity

Being characterized by complex or convoluted details.