In the Long Run, After Trade Occurs, the Equilibrium Number

question 78

Multiple Choice

In the long run, after trade occurs, the equilibrium number of monopolistically competitive firms:

• A) is less than the total number of firms worldwide in autarky.
• B) is the same as the total number of firms worldwide in autarky.
• C) is greater than the total number of firms worldwide in autarky.
• D) may be less than, the same as, or greater than the total number of firms worldwide in autarky.

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Definitions:

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan balance.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, considering the time value of money.

Individual Retirement Account

A tax-advantaged investing tool that individuals use to earmark funds for retirement savings.

Rate of Return

The profit or deficit generated from an investment during a defined timeframe, represented as a percentage of the investment's initial value.