In the short run, a monopolistically competitive firm will A. select the rate of output where price equals marginal cost. B. make a profit. C. not advertise because the effects will not be realized until the long run. D. select the rate of output where marginal revenue equals marginal cost.

Adrawback of short-term contracting as an alternative to making a component in-house is thata. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. b. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. c. it fails to allow a long planning period that individual market transactions provide. d. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.