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The Following Question Are Based on the Following Diagram for a Monopolistically

Question 20

Multiple Choice

The following question are based on the following diagram for a monopolistically competitive firm:
The following question are based on the following diagram for a monopolistically competitive firm:    -This short-run equilibrium price A)  is also the long-run equilibrium price. B)  is not profitable for the monopolistic competitor. C)  requires the firm to advertise to avoid continuing to lose money. D)  equals marginal cost. E)  will not be sustained because there is an incentive for entry.
-This short-run equilibrium price


A) is also the long-run equilibrium price.
B) is not profitable for the monopolistic competitor.
C) requires the firm to advertise to avoid continuing to lose money.
D) equals marginal cost.
E) will not be sustained because there is an incentive for entry.

Correct Answer:

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