In theory, the representative firm in monopolistic competition earns only a normal profit. Why might that outcome not always occur in the real world of small firms?
What will be an ideal response?
Some small firms may be able to differentiate their products in a such way that other firms may not be able to duplicate them, and thus earn economic profits. Also, entry into some industries can be difficult and expensive, which may deter the entry of new firms even over time.
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A point lying beyond the utilities possibilities frontier is
A) unattainable. B) efficient. C) inefficient. D) profitable.
If banks faced a 100 percent reserve requirement, a decrease in banking reserves of $4 million would: a. increase the money supply by $4 million
b. increase the money supply by $400 million. c. decrease the money supply by $4 million. d. decrease the money supply by $400 million.
In the long run in a perfectly competitive industry
A. opportunity costs are negligible. B. only entrepreneurs will earn more than their opportunity costs. C. some firms will be experiencing economic losses. D. economic profits will be zero.
A review of occupational distribution of population from time to time helps us to know the
A. rate of which the population grows B. number of people that makes up the labour force C. efficiency of the working population D. industries which are becoming less important E. number of people that are bot employed