Which of the Following Is Correct

question 300

Multiple Choice

Which of the following is correct?

• A)A firm in monopolistic competition does not have excess capacity in the long run.
• B)A firm in perfect competition operates at maximum average total cost in the long run.
• C)In the long run,a firm in monopolistic competition maximizes its profit at a point where price is equal to average total cost but the average total cost is not minimized.
• D)In the long run,a firm in monopolistic competition earns zero economic profit and its price is equal to the minimum average total cost.
• E)In the long run,a firm in monopolistic competition can earn an economic profit because of product differentiation.

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Definitions:

Security Returns

The gains or losses from investing in a security, usually expressed as a percentage of the initial investment.

Arbitrage Opportunities

Situations where a financial instrument, or a combination of financial instruments, can be bought and sold simultaneously in different markets to profit from price discrepancies.

Risk-Free Rate

The return on investment with no risk of financial loss, often represented by the yield on government securities.