Is a Monopolistically Competitive Firm Allocatively Efficient

question 216

Multiple Choice

Is a monopolistically competitive firm allocatively efficient?

• A)No, because it does not produce at minimum average total cost.
• B)Yes, because it produces where marginal cost equals marginal revenue.
• C)No, because price is greater than marginal cost.
• D)Yes, because price equals average total cost.

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Definitions:

Cognitive

Pertaining to the mental processes involved in acquiring knowledge and understanding through thought, experience, and the senses.

Developmental

Pertaining to the process of growth and change throughout life, often in the context of psychological or physical maturation.

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Norepinephrine

A neurotransmitter involved in arousal and alertness, playing a key role in the body's fight or flight response.