Which of the Following Statements Is Not Correct

question 421

Multiple Choice

Which of the following statements is not correct?

• A) Firms in monopolistic competition and monopoly can earn economic profits in the short run.
• B) Firms in monopolistic competition and perfect competition produce the welfare-maximizing level of output.
• C) Monopolistically competitive firms price above marginal cost, whereas competitive firms price at marginal cost.
• D) Firms wishing to enter a monopolistically competitive market can do so freely, whereas firms wishing to enter a monopoly market will face barriers.

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Definitions:

Straight-Line Depreciation

A strategy for dividing the cost of a substantial asset through its operational life in even yearly portions.

Productivity

The measure of efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.

Machinery

Industrial or commercial equipment designed to perform specific tasks, often part of the manufacturing or production process.

Federal Income Tax

A tax levied by the federal government on the annual income of individuals, corporations, trusts, and other legal entities.