In the Long Run, a Monopolistically Competitive Firm Charges a Price

question 95

Multiple Choice

In the long run, a monopolistically competitive firm charges a price that is

• A)equal to marginal cost.
• B)less than marginal cost.
• C)greater than the minimum average total cost.
• D)equal to the minimum average total cost.
• E)equal to marginal revenue.

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Definitions:

Units-Of-Production Method

An accounting method for depreciation that allocates expense based on the actual usage or production levels of assets.

Scrap Value

The estimated value at which an asset can be sold after it is no longer useful for production, generally at the end of its depreciable life.

Units-Of-Production Method

A depreciation method that allocates the cost of an asset over its useful life based on the number of units it produces.

Scrap Value

Scrap Value is the estimated residual value of an asset at the end of its useful life, representing what can be recovered from selling the asset as scrap or for parts.