At equilibrium, the market will clear, with no surpluses or shortages occurring.

A situation in which there is a reduction in quantity supplied to zero when there is the slightest decrease in price is

A) perfectly elastic supply. B) perfectly elastic demand. C) perfectly inelastic supply. D) perfectly inelastic demand.

Monopolistically competitive firms do not achieve allocative efficiency in the long run because

a. marginal cost equals marginal revenue b. marginal cost is greater than marginal revenue c. marginal cost is less than marginal revenue d. price is less than marginal cost e. price is greater than marginal cost