Which of the following statements best describes the price, output, and profit conditions of monopolistic competition?
a. Price will equal marginal cost at the profit-maximizing level of output; profits will be positive in the long-run.
b. Price will always equal average variable cost in the short run and either profits or losses may result in the long run.
c. Marginal revenue will equal marginal cost at the short run, profit-maximizing level of output; in the long run, economic profit will be zero.
d. Marginal revenue will equal average total cost in the short run; long-run economic profits will be zero.
c
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In macroeconomic modelling, as price flexibility increases ________
A) the short-run aggregate supply schedule will get flatter B) the short-run aggregate supply schedule will get steeper C) the short-run aggregate supply schedule will shift to the right D) the short-run aggregate supply schedule will shift to the left
Use the following data to answer the next question. The disposable income (DI) and consumption (C) schedules are for a private, closed economy (an economy with no government and no international trade). All figures are in billions of dollars.Disposable IncomeConsumption$300$310350340400370450400500430If disposable income is $550, we would expect consumption to be
A. $430. B. $460. C. $450. D. $470.