Monopolistic competitive firms in the long run earn:
a. negative economic profits.
b. zero pure economic profits.
c. None of these choices are correct.
d. positive economic profits.
b
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The expectations theory and the segmented markets theory do not explain the facts very well, but they provide the groundwork for the most widely accepted theory of the term structure of interest rates
A) the Keynesian theory. B) the separable markets theory. C) the liquidity premium theory. D) the asset market approach.
The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. The potential entrant cannot earn a profit if the incumbent
A) chooses the Cournot level of output. B) chooses the Stackelberg leader level of output. C) shuts down. D) deters entry.
If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier is:
a. 2. b. 5. c. 8. d. 10.
One concern regarding the North American Free Trade Agreement (NAFTA) was that it would lead:
A. highly skilled workers in the United States to lose their jobs. B. unskilled workers in the United States to lose their jobs. C. the total value of goods and services produced by the United States to fall. D. wages in Mexico to rise.