Compared to a Perfectly Competitive Firm, the Demand Curve Facing

question 224

Multiple Choice

Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is

• A)more elastic because there are many close substitutes for the product of a monopolistically competitive firm.
• B)less elastic because monopolistically competitive firms produce similar, but not identical, products.
• C)just as elastic because there are many sellers in both markets.
• D)more elastic because in the long run, the demand curve is tangent to the firm's average total cost curve.

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Definitions:

End-Of-Period Spreadsheet

A tool used in accounting to compile all balances and adjustments at the end of an accounting period before the preparation of financial statements.

Journal Entry

A record in accounting that represents a transaction and its effect on various accounts, used to keep track of all business transactions in a company's books.

Revenues

Income generated from normal business operations and other business activities.

Expenses

Costs incurred in the operation of a business that reduce profitability, such as rent, salaries, and utilities.