Monopolistically Competitive Firms Do Not Achieve Allocative Efficiency in the Long

question 224

Multiple Choice

Monopolistically competitive firms do not achieve allocative efficiency in the long run because

• A)marginal cost equals marginal revenue
• B)marginal cost is greater than marginal revenue
• C)marginal cost is less than marginal revenue
• D)price is less than marginal cost
• E)price is greater than marginal cost

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Definitions:

Investment In Bonds

This is the act of purchasing bonds as a means of investing money, typically for earning interest income and obtaining potential price appreciation.

Interest Revenue

Income earned from investments, loans, or other interest-bearing financial assets.

Carrying Amount

The balance of the bonds payable account (face amount of the bonds) less any unamortized discount or plus any unamortized premium.

Gain

A financial increase resulting from a transaction that exceeds the costs or purchase prices of the assets sold, not related to the primary operations.