If firms in monopolistic competition are earning economic profits, then
A) they can expect to earn the profits indefinitely.
B) new rivals enter the industry, and the demand for any seller's good decreases.
C) the market demand becomes more inelastic.
D) the industry is in long-run equilibrium.
E) new rivals enter the industry, and the demand for any seller's good increases.
B
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The rate of time preference is positive
a. only when interest rates are positive b. because interest rates are positive c. only when people save d. because people save e. because people prefer goods now to the same goods later
The part of the federal budget that has increased at the fastest rate is
A. government salaries. B. entitlements. C. interest payments. D. national defense.
If there is a trade deficit, which of the following is true?
A. The current account balance could be positive, negative, or zero. B. There will be a current account deficit. C. There will be a financial account surplus. D. There will be a current account surplus.
If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the price will be
A) $2. B) $4. C) $5. D) $6.