A monopolistically competitive firm is currently producing the profit-maximizing level of output. If the price of a variable input increases, the firm’s average total cost and marginal cost curves will shift upward.
Option C
Explanation:
Monopolistic competition is a sort of incomplete competition that requires multiple companies to sell a product which is distinct and thus not ideal alternatives.
Monopoly competition is a framework of the market that integrates monopoly aspects and market competition. A dynamic monopoly market basically has freedom of entering and exiting, but businesses can distinguish between their goods.
We get an inelastic curve of demand and therefore can set the prices. Nevertheless, because the right to participate would allow supernormal incentives to more businesses to gain market share, which will result in regular long-term profits .
Answer:
its average total cost will decrease as production increases
Explanation:
Economies of scale are characteristics that cause a producer’s average cost to drop as production increases. As output increases, the cost per unit falls.
