Which of the Following Statements About a Monopolistically Competitive Firm

question 41

Multiple Choice

Which of the following statements about a monopolistically competitive firm in the short run is true?

• A)Profits will be maximized at the point at which price equals marginal cost and hence there is no deadweight loss.
• B)The firm may be able to earn a super normal profit in the short run and the long run.
• C)Entry into the market is difficult.
• D)Advertising may enable a firm to charge a higher price than that charged by rival firms.
• E)It faces a perfectly elastic demand curve

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Definitions:

Acquisition

Acquisition refers to the process of gaining knowledge, skills, or qualities through experience, practice, or the receiving of information.

Performance

The act of carrying out or accomplishing an action, task, or function.

Punishment Consistent

The reliable and systematic application of a negative consequence following an undesired behavior in order to decrease its occurrence.

More Severe

Describing a condition or situation that is of greater intensity, seriousness, or urgency than previously noted or compared to others.