Refer to Figure 26

question 31

Multiple Choice

Refer to Figure 26.4 for a monopolistically competitive firm.If the firm currently faces Demand₂ and MR₂, then it will earn

• A)A positive economic profit, and firms will enter the industry.
• B)A positive economic profit, and firms will exit the industry.
• C)A negative economic profit, and firms will exit the industry.
• D)Zero economic profit, and neither entry nor exit will occur.

---

Definitions:

Categorical Imperative

A foundational concept in Kantian ethics that proposes an action is morally right if it can be universally applied as a principle for behavior, emphasizing duty over consequences.

Law of Reason

A principle suggesting that the laws governing human conduct should be based on logic, ethics, and rationality rather than on arbitrary dictums or supernatural beliefs.

Hypothetical Imperative

A command or rule that applies conditionally, suggesting action is necessary to achieve a particular end or goal, as opposed to moral absolutes.