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Question 20

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Use the following to answer questions below:
Use the following to answer questions below:    -Refer to the graph of Market 1. A monopolistically competitive firm that is maximizing profit given the unit cost curves displayed in the graph A)  is in long-run equilibrium. B)  will produce less and charge a lower price in the long run. C)  will produce less and charge a higher price in the long run. D)  will produce more and charge a lower price in the long run.
-Refer to the graph of Market 1. A monopolistically competitive firm that is maximizing profit given the unit cost curves displayed in the graph


A) is in long-run equilibrium.
B) will produce less and charge a lower price in the long run.
C) will produce less and charge a higher price in the long run.
D) will produce more and charge a lower price in the long run.

Correct Answer:

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