-Refer to the Above Figure

question 269

Multiple Choice

-Refer to the above figure. Which of the following statements about panel D in the figure is TRUE?

• A) The figure represents a long-run equilibrium for a monopolistic competitor.
• B) The figure represents an industry long-run equilibrium for monopolistic competition.
• C) The figure is in error since it doesn't show the monopolistic competitor making profits in the long run.
• D) The figure is in error since it has marginal cost intersecting the ATC curve at a point other than the minimum of ATC.

---

Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as utility bills that increase with production volume.

Cash Break-Even

The sales level where operating cash flow is equal to zero.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and loan payments.

Selling Price

The amount at which a product or service is offered to the market.