In the long run the prices charged by a firm in monopolistic competition will be

a. high enough to provide profits to the firm.
b. so low that many firms will drop out of the industry.
c. equal to marginal cost.
d. equal to average cost, including the opportunity cost of capital.

Question

23-12-2019
Business

contestada

In the long run the prices charged by a firm in monopolistic competition will be

a. high enough to provide profits to the firm.
b. so low that many firms will drop out of the industry.
c. equal to marginal cost.
d. equal to average cost, including the opportunity cost of capital.

Respuesta :

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agustinsr99 agustinsr99 · Answer 1 · 2019-12-24T20:55:26+01:00

Answer: The correct answer is "d. equal to average cost, including the opportunity cost of capital.".

Explanation: In the long run the prices charged by a firm in monopolistic competition will be equal to average cost, including the opportunity cost of capital.

In long-term monopolistic competition, the demand curve will be tangent to the average long-term cost and the price set at this level. The benefits will be equal to zero and therefore there will be no entry or exit of companies.

In the long run the prices charged by a firm in monopolistic competition will be a. high enough to provide profits to the firm. b. so low that many firms will drop out of the industry. c. equal to marginal cost. d. equal to average cost, including the opportunity cost of capital.

Respuesta :

Otras preguntas

In the long run the prices charged by a firm in monopolistic competition will be

a. high enough to provide profits to the firm.
b. so low that many firms will drop out of the industry.
c. equal to marginal cost.
d. equal to average cost, including the opportunity cost of capital.