For a monopolistically competitive firm, barriers to entry are high, which allows the firm to earn positive economic profits in the long run.
Answer the following statement true (T) or false (F)
False
Entry barriers are low in monopolistic competition, so new entrants cannot be kept out of the market.
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What is the effect of a higher price level on planned spending?
a. People are less willing to spend at each income level. b. It makes stocks and bonds more attractive. c. Consumers purchases more number of durable goods. d. Imports of a nation fall and exports rise leading to an increase in net exports.
Refer to the graph shown. If price is increased from $3 to $4, consumer surplus will fall by:
A. 50. B. 100. C. 25. D. 125.
In a market with positive externalities, the market equilibrium price will be greater than the efficient equilibrium price
Indicate whether the statement is true or false
Explain how free international trade tends to lead to factor price equalization under the assumptions of the HO model. What does this process predict about which groups should be in favor of or opposed to free international trade?
What will be an ideal response?