In the Short Run, the Monopolistic Competitor Is Just Like

question 81

Multiple Choice

In the short run, the monopolistic competitor is just like the perfect competitor in that

• A) equilibrium is determined by setting price equal to marginal cost.
• B) either type of firm can earn economic profits, experience economic losses, or break even in the short run.
• C) each equates marginal revenue and marginal cost in order to maximize profits, with the result that price exceeds marginal revenue.
• D) new firms enter in the short run when firms are making profits.

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