Asked by zachery spence on Jul 08, 2024
Verified
Which statement is true?
A) The monopolistic competitor can make a profit in the long run.
B) The monopolistic competitor operates at an output that is the lowest point on the ATC.
C) The monopolistic competitor has a small influence on price because its products are differentiated.
D) None of these statements are true.
Monopolistic Competitor
A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power in setting prices.
- Identify the long-term outcomes for firms in a monopolistically competitive market, including profit potentials.
- Acknowledge how price and output decision-making is shaped by the presence of monopolistic competition.
Verified Answer
JD
Juliet dentehJul 14, 2024
Final Answer :
C
Explanation :
The statement that the monopolistic competitor has a small influence on price because its products are differentiated is true. In contrast, A is false because monopolistic competition involves zero economic profit in the long run, B is false because the monopolistic competitor operates at a point where price exceeds marginal cost, and D is false because at least one statement is true.
Learning Objectives
- Identify the long-term outcomes for firms in a monopolistically competitive market, including profit potentials.
- Acknowledge how price and output decision-making is shaped by the presence of monopolistic competition.
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