Given the above chart for a monopolistically competitive firm which of the below

Question

Given the above chart for a monopolistically competitive firm which of the below answers is true?

This firm is earning economic profits

This firm is earning economic losses

This firm is breaking even

This firm is breaking even but making accounting profits

It is not possible to determine this firms profit level given the information in the graph

This firm is earning economic profits

This firm is earning economic losses

This firm is breaking even

This firm is breaking even but making accounting profits

It is not possible to determine this firms profit level given the information in the graph

Explanation / Answer

The chart is not visible but ideally for a monopolistically competitive firm we must have that the firm earns only normal profits in the long run when the average cost curve is tangent to the average revenue curve.

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.