The Entry and Exit of Firms in a Monopolistically Competitive

question 196

Multiple Choice

The entry and exit of firms in a monopolistically competitive market guarantee that

• A)marginal revenue equals marginal cost and average total cost is minimized.
• B)firms can earn economic profits in the long run.
• C)price equals average total cost in the long run.
• D)firms can earn economic profits in the short run.

---

Definitions:

Stabilize The Economy

Government or central bank policies aimed at maintaining economic growth, curbing inflation, and reducing unemployment to prevent economic recessions or depressions.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months.

Society

A structured community of people bound together by similar traditions, institutions, or nationality.

Waste Of Resources

The inefficient or ineffective use of materials, energy, effort, money, or time in achieving a goal or outcome.