Because a Monopolistically Competitive Firm Has Some Market Power, in the Long-Run

question 546

Multiple Choice

Because a monopolistically competitive firm has some market power, in the long-run the price of its product exceeds its

• A)average revenue.
• B)average total cost.
• C)marginal cost.
• D)None of the above is correct.

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Definitions:

Monopolistic Competitive Firms

These are companies in a market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power.

Elastic

A term used in economics to describe a situation where the demand or supply for a good or service significantly changes in response to a change in price.

Product Differentiation

A tactic used by companies to distinguish their products from those of competitors by highlighting unique features.

Customization

The process of modifying goods or services to meet specific customer preferences or requirements.