Author Question: A monopolistically competitive firm that is incurring a loss will ________ as long as its revenue ... (Read 29 times)

danielfitts88 · **on:** Apr 19, 2019

Question 1

If ________, then a profit-maximizing, monopolistically competitive firm earns positive economic profits.

◦ P >
ATC
◦ P <
ATC
◦ P =
ATC
◦ All of these are possible.

Question 2

A monopolistically competitive firm that is incurring a loss will ________ as long as its revenue covers variable costs.

◦ produce in the long run
◦ shut down in the short run
◦ earn a profit in the long run
◦ produce in the short run

stano32 · **Reply #1 on:** Apr 19, 2019

Answer 1

P >
ATC

Answer 2

produce in the short run

danielfitts88 · **Reply #2 on:** Apr 19, 2019

Thanks

stano32 · **Reply #3 on:** Apr 19, 2019

Welcome