B

问题如下：

Question In a business landscape marked by monopolistic competition, a company is most likely to:

选项：

A.sustain economic profit in the long run.

B.

possess a well-defined supply function that mirrors its marginal and average expenses.

C.compete with numerous firms, each with its unique product differentiation approach.

解释：

Incorrect. Similar to the scenario in a perfectly competitive market, when entry barriers are relatively low, additional companies will join the market, attracting some of the original company's clientele. This influx of new competitors will reduce the demand for all businesses offering similar items. Over time, the economic profit for firms in monopolistic competition will diminish to zero.

Incorrect. Within monopolistic competition, a clear supply function doesn't exist. The decision on the right output level is derived from where MC meets MR. Yet, the set price is influenced by the market's demand curve. The supply curve of the firm should indicate the amount it's ready to offer at different price points. This data isn't shown by either the marginal or average cost.

Correct. As suggested by its name, monopolistic competition blends elements of different market structures. The hallmark of monopolistic competition is the emphasis on product differentiation. Even though the market consists of several firms offering similar products, each one strives to make its product stand out, achieving differentiation in multiple ways.


The Firm and Market Structures

• describe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly