A profit-maximizing firm in the monopolistic competition should shut down in the short run: A....
Question:
A profit-maximizing firm in the monopolistic competition should shut down in the short run:
A. under no circumstances.
B. if the price is always less than the average variable cost.
C. if the price is always less than the average total cost.
D. if the price is always less than the average fixed cost.
E. if marginal revenue is less than the price.
Monopolistic Competition:
In economics, monopolistic competition is a market where many buyers and sellers exchange products that differ in quality and appearance. These firms compete to capture major market shares through advertisements.
Answer and Explanation: 1
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View this answerThe correct option is B.) if the price is always less than the average variable cost .
The average variable cost depicts the cost incurred by the...
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Monopolistic Competition: Definition, Theory, Characteristics & Examples
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Chapter 3 / Lesson 56
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Learn the monopolistic competition definition with examples. Study monopolistic competition vs. perfect competition and other market types to learn the differences.
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