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:

Anticipation

The act of expecting or foreseeing something, often involves preparing for future events or changes.

Prevention

The action of stopping something from happening or arising, especially in terms of health and disease.

Proaction

The approach of taking strategic, anticipatory actions to create or control future developments, rather than merely reacting to events as they happen.

Genius Bar

A tech support station located inside Apple's retail stores, offering personal support and troubleshooting services.