In the Short Run, a Monopolistically Competitive Firm Produces at the Optimal

question 247

Multiple Choice

In the short run, a monopolistically competitive firm produces at the optimal level of output and is earning positive economic profits. Which of the following must be TRUE for this firm?

• A) MR = MC and P = ATC.
• B) MR = MC and P > ATC.
• C) MR > MC and P = ATC.
• D) P = MR = MC > ATC.

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Definitions:

Entry Condition

A precondition or requirement that must be met before the execution of a certain block of code or function.

Break Statement

The break statement terminates the current loop, switch, or label statement and transfers control to the code following the terminated statement.

For Loop

A control flow statement for specifying iteration, allowing code to be executed repeatedly based on a given boolean condition.

Scanner Object

In Java, an object used to read the input from various sources, including user input from the console.