Asked by
Shellie Denise
on Oct 25, 2024
Verified
Use the following two statements about monopolistic competition to answer this question. I. In the long run, the price of the good will equal the minimum of the average cost.
II) In the short run, firms may earn a profit.
A) I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) I and II are false.
Average Cost
The total cost divided by the number of goods produced, representing the cost per unit of output.
Long Run
A period of time in economics during which all factors of production and costs are variable, allowing for full adjustment to changes.
Short Run
Period of time in which quantities of one or more production factors cannot be changed.
- Examine the prolonged equilibrium in monopolistic competition, particularly how it pertains to zero economic profits and inefficiencies.
Verified Answer
YG
Learning Objectives
- Examine the prolonged equilibrium in monopolistic competition, particularly how it pertains to zero economic profits and inefficiencies.