Is a Monopolistically Competitive Firm Allocatively Efficient

question 216

Multiple Choice

Is a monopolistically competitive firm allocatively efficient?

• A)No, because it does not produce at minimum average total cost.
• B)Yes, because it produces where marginal cost equals marginal revenue.
• C)No, because price is greater than marginal cost.
• D)Yes, because price equals average total cost.

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Definitions:

Forefinger

The first finger or the finger next to the thumb, also known as the index finger, used for pointing or indicating.

Size Constancy

A perceptual mechanism that allows the brain to perceive objects as having a constant size, despite changes in distance or the size of the image on the retina.

Physical Dimensions

Measurements or aspects of objects and spaces, such as length, width, height, and volume.

Kinesthetic Sense

The ability to perceive the position and movement of our limbs and body in space, often referred to as muscle memory or the sense of movement.