Asked by
Jason Nguyen
on Nov 16, 2024
Verified
Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?
A) MR > MC
B) P = MC
C) P > ATC
D) MR = MC
Short-Run Equilibrium
Short-run equilibrium occurs when in a market, the quantity supplied equals the quantity demanded at the current price, before any long-term adjustments are made.
MR > MC
A situation in marginal analysis where the marginal revenue (MR) exceeds the marginal cost (MC), suggesting a potential increase in profitability by expanding production.
P > ATC
A scenario in which the price of a good is greater than the average total cost of producing that good, indicating potential profitability for the firm.
- Identify the criteria for maximizing profits across various market configurations.
- Evaluate the conditions for equilibrium in the short and long term within monopolistically competitive markets.
Verified Answer
OE
Learning Objectives
- Identify the criteria for maximizing profits across various market configurations.
- Evaluate the conditions for equilibrium in the short and long term within monopolistically competitive markets.