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A Monopolistically Competitive Firm Is Operating in the Short Run

Question 170

Multiple Choice

A monopolistically competitive firm is operating in the short run at the optimal level of output and is earning negative economic profits. Which of the following must be TRUE?


A) ATC > P > MR = MC.
B) ATC = P > MR = MC.
C) ATC > P = MR = MC.
D) ATC > P > MR > MC.

Correct Answer:

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