It is the case in both perfectly competitive and monopolistically competitive markets that other firms will enter when firms are making positive economic profits, until price eventually equals ATC and economic profits are zero. Despite these similarities, in a perfectly competitive market total surplus is maximized, while in a monopolistically competitive market surplus is not maximized. Which of the following statements explains this difference? a. In monopolistically competitive markets, firms face horizontal demand curves while in perfectly competitive markets firms face downward-sloping ones.
b. In perfectly competitive markets, firms operate where MR is equal to MC, which is where ATC is minimized.
c. In monopolistically competitive markets, firms operate of the ATC curve which means that MC is higher than ATC.
d. In monopolistically competitive markets, firms operate where ATC is equal to MC which is where ATC is minimized.

Example1 lcnrv: ted company uses the lower of cost or nrv method in valuing its inventory items. the inventory at december 31, 2017, consists of products a, b and c, each having 1,000 units. relevant unit data for these products appear below: item a item b item c cost $ 80 $80 $80 estimated selling price 180 100 90 estimated selling cost 30 30 30 required: using the lower of cost or net realizable value rule, determine the proper value of inventory for balance sheet reporting purposes at december 31, 2017. prepare any necessary journal entry. apply the lower of cost or nrv method: • on an individual inventory basis; • on a group basis; • on a total inventory basis. solution worksheet: inventory (on an individual basis): inventory value item nrv cost lc- item a item b item c total inventory (on a group basis): inventory value item nrv cost lc- group 1 (item a and b) group 2 (item c) total inventory (on an aggregate inventory basis): inventory value item nrv cost lc- total inv