In the short run, the monopolistic competitor is just like the perfect competitor in that

A) equilibrium is determined by setting price equal to marginal cost.
B) either type of firm can earn economic profits, experience economic losses, or break even in the short run.
C) each equates marginal revenue and marginal cost in order to maximize profits, with the result that price exceeds marginal revenue.
D) new firms enter in the short run when firms are making profits.


Answer: B

Economics

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