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Which of the following is NOT a disadvantage of cost-plus pricing?a.) Profit limitationsb.) Defensibility c.) Inappropriate treatment of fixed costsd.) Arbitrary overhead allocations
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- In the short run, a monopolistically competitive firm produces at the optimal level of output and is earning positive economic profits. Which of the following describes how the firm will adjust in the long run? A. The entry of new firms shifts the firm's marginal cost and average cost curves downward, decreasing the firm's level of output and the price the firm can charge until price equals average total cost.B.The exit of firms shifts the firm's demand and marginal revenue curves rightward, increasing the firm's level of output and the price the firm can charge until price equals average total cost.C.The entry of new firms shifts the firm's demand and marginal revenue curves leftward, decreasing the firm's level of output and increasing the price the firm can charge until price equals average total cost.D. The entry of new firms shifts the firm's demand and marginal revenue curves leftward, decreasing the firm's level of output and the price the firm can charge until price equals average total cost.