Refer to the above graph of the representative firm in monopolistic competition. Point b indicates
A) a situation where the firm is earning economic profits.
B) the price-output combination that yields maximum profits.
C) a point that cannot be the long-run equilibrium point.
D) the lowest possible average cost of producing the firm's product.
Correct Answer:
Verified
Q215: Which statement concerning monopolistic competition is false?
A)In
Q216: Q217: Assume that the short-run cost and demand Q218: Q219: Assume that the short-run cost and demand Q221: Compared to a purely competitive firm in Q222: In monopolistically competitive markets, resources are Q223: At long-run equilibrium in monopolistic competition, there Q224: In the long run, the representative firm Q225: Excess capacity implies
A)overallocated because
A)productive inefficiency.
B)allocative inefficiency.
C)productive efficiency.
D)allocative efficiency.
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