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Economics
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In the short​ run, a monopolistically competitive firm will

A. may incur an economic loss

B. will leave the industry if it is incurring an economic loss

C. either earns an economic profit or breaks even

D. incurs an economic loss if it fails to produce the quantity at which marginal revenue equals marginal cost

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Vaishali Yadav
Vaishali YadavLv10
5 Sep 2020
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1. If the price faced by a competitive firm is greater than its average variable cost, the firm:

a. should produce the output level where P=MC and it is making a positive profit
b. should produce that output level where P=MC and it is incurring loss
c. should produce that output level where P=MC and it may make a positive profit or incur a loss
d. none of the above

2. When a firm in perfect competition is maximizing profits and produces that level of output where price, marginal revenue, marginal cost, average total cost, long-run marginal cost, and long run average total cost are all equal, the firm:

a. earns a positive economic profit and it serves to signal other competing firms to enter the market
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c. earns zero economic profit and is in a long run equilibrium
d. incurs a loss and will shut own in the long run

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