Asked by
Shane Adams
on Nov 05, 2024
Verified
In long‐run equilibrium for a monopolistically competitive firm, the firm's demand curve is ________ its average total cost curve.
A) above
B) below
C) just tangent to
D) either above or below
Average Total Cost Curve
A graphical representation showing how the average total cost of production changes as the quantity of output changes.
Long-Run Equilibrium
A state in which all factors of production and costs are variable, allowing firms to make adjustments and leading to a situation where economic profit equals zero.
Just Tangent To
A condition where two curves meet at only one point without intersecting, often used in the context of optimizing problems.
- Discriminate between the characterizations of short-run and long-run equilibria in monopolistic competition scenarios.
- Comprehend the circumstances that lead to sustained equilibrium in markets with monopolistic competition, including the interplay between price, average total cost, and production levels.
Verified Answer
KK
Learning Objectives
- Discriminate between the characterizations of short-run and long-run equilibria in monopolistic competition scenarios.
- Comprehend the circumstances that lead to sustained equilibrium in markets with monopolistic competition, including the interplay between price, average total cost, and production levels.