Why does a firm in monopolistic competition earn zero economic profit rather than an economic profit in the long run?
What will be an ideal response?
Entry into monopolistically competitive markets is easy because there are no barriers to entry. So when firms in monopolistic competition have an economic profit, other firms are attracted to enter the industry, thereby decreasing profits for everyone. Entry continues as long as there is an economic profit so, in the long run when all entry is completed, the firms earn zero economic profit.
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When the labor market is in equilibrium, real GDP ________ potential GDP
A) is greater than B) is equal to C) is less than D) might be greater than, less than, or equal to E) is not comparable to
Bank accounts and bonds are examples of money-fixed assets.
Answer the following statement true (T) or false (F)
The difference between U.S. financial regulation between the 1930s-to-1980 period and the 1980-to-2010 period is:
a. The earlier period was characterized by relatively loose government regulations and the later one was characterized by stricter government regulations. b. The earlier period was characterized by heavy use of the originate-to-hold" strategy. c. The earlier period was characterized by recurring, nation-wide speculative housing bubbles. d. The earlier period was characterized by heavy use of securitization. e. All of the above.
Arbitrage is the purchase of foreign currency on one market for immediate resale on a foreign market in order to profit from a price discrepancy.
a. true b. false