In the long run, profits in a monopolistic competition market are zero because:
a. of government regulations.
b. of collusion.
c. firms are free to enter and exit the market.
d. firms produce a differentiated product.
Ans: c. firms are free to enter and exit the market.
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When a bank makes a loan by crediting the borrower's checking account balance with an amount equal to the loan:
A. money is created. B. the bank immediately loses reserves. C. the bank gains new reserves. D. the Fed has made an open-market purchase.
When aggregate demand increases, there is a movement ________ along the AS curve and ________
A) up; an upward shift of the short-run Phillips curve B) down; a movement down along the short-run Phillips curve C) up; a movement up along the short-run Phillips curve D) up; a movement down along the short-run Phillips curve E) down; a downward shift of the short-run Phillips curve
If an indifference map for a consumer is made up of straight, negatively sloped lines, the marginal rate of substitution ________ as more of the good on the horizontal axis is consumed
A) does not diminish B) diminishes C) increases D) More information is needed to answer the question.
Unemployment in the post-World War II era (1945–50)
(a) was reduced only because of the post-war decline in the size of the civilian labor force. (b) rose above wartime levels, but remained far below the levels of the 1930s. (c) rose in response to the decline in civilian consumption levels. (d) remained at the low levels achieved in World War II (1941–45).