What type of profit can a firm in monopolistic competition earn in the long run? Explain your answer
What will be an ideal response?
In the long run, a firm in monopolistic competition can earn only zero economic profit, that is, a normal profit. It will not incur an economic loss in the long run because it will close. It cannot earn a positive economic profit because there are no barriers to entry. So if a firm in monopolistic competition is earning an economic profit, in the long run new firms enter the market, produce a similar product, and decrease the demand for the initial firm's product. Entry continues until the firms earn zero economic profit, so its owners make a normal profit.
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Selling a product in a foreign nation at a price less than its cost of production is called
A) infant-industry exploitation. B) absolute advantage. C) dumping. D) net exporting.
If, in the game in Scenario 13.14, R moves first, C will respond with
A) Q = 50. B) Q = 100. C) Q = 150. D) a mixed strategy over the three choices that includes some positive likelihood for each Q. E) a mixed strategy over the choices Q = 50 and Q = 100.
As one moves down a straight-line demand curve, the elasticity increases
a. True b. False Indicate whether the statement is true or false
Economic models are used to:
A. explain every detail of an economic theory. B. explore decision making by individuals, firms and other organizations. C. build physical renditions of government construction projects. D. represent the complexities of economic environments.