Use the figure below to answer the following questions. Figure 13.2.1
-Refer to Figure 13.2.1.This firm in monopolistic competition will
A)make an economic profit in the short run.
B)make zero economic profit in the short run.
C)incur an economic loss.
D)make an economic profit in the long run.
E)incur an economic loss in the long run.

Question

Use the figure below to answer the following questions.  Figure 13.2.1
-Refer to Figure 13.2.1.This firm in monopolistic competition will
A)make an economic profit in the short run. 
B)make zero economic profit in the short run. 
C)incur an economic loss. 
D)make an economic profit in the long run. 
E)incur an economic loss in the long run.

Quizplus · Accepted Answer

In monopolistic competition, firms can make an economic profit in the short run if the price they can charge (based on their demand curve) is above their average total cost. The specific details of Figure 13.2.1 are not provided here, but the choice suggests that the firm's price exceeds its average total cost, leading to economic profit.

Use the Figure Below to Answer the Following Questions