Suppose That a Monopolistically Competitive Firm Is in Long-Run Equilibrium

question 108

Multiple Choice

Suppose that a monopolistically competitive firm is in long-run equilibrium.The firm's demand curve is tangent to its average cost curve at Q = 25.Average cost is minimized at Q = 35, where average cost is $50.Which of the following is true?

• A)This firm maximizes profit at an output level of 25 units.
• B)This firm maximizes profit at an output level of 35 units.
• C)This firm maximizes profit at an output level less than 25 units.
• D)This firm maximizes profit at an output level greater than 35 units.
• E)There is not enough information to find the firm's profit-maximizing level of output.

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Definitions:

Peripheral Route

A mode of persuasion that occurs when someone evaluates a message based on superficial cues rather than the actual content of the message.

Stereotypes

Overgeneralized beliefs about a particular category of people, which often lead to assumptions and judgments without individual evidence.

Fear Arousal

The emotional state resulting from perceived threats leading to anxiety, heightened sensory awareness, and readiness for fight or flight.

Persuasive Tactic

Strategies or methods employed to convince or influence others to adopt a certain belief, attitude, or course of action.