In the long run, firms in monopolistic competition earn zero economic profit. When firms earn zero economic profit, in the long run they exit the industry
A) The first sentence is correct and the second sentence is incorrect.
B) The first sentence is incorrect and the second sentence is correct.
C) Both sentences are correct.
D) Both sentences are incorrect.
E) More information about the presence or absence of barriers to entry and exit is needed to determine if the statements are true or false.
A
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Which of the following statements pertains to the four-firm concentration ratio? I. It is the percentage of the value of sales accounted for by the four largest firms in an industry. II
A high concentration ratio is indicative of a high degree of competition. III. The ratio is used to measure product differentiation. A) I only B) I, II only C) I, III only D) I, II, and III
The process of money creation can be reversed:
a. when a person pays a loan back to a bank b. when the government passes a law against it. c. when customers begin to deposit money into banks. d. when loans are extended to customers.
In 2002 it looked like the Argentinean government might default on its debt (which eventually it did). The open-economy macroeconomic model predicts that this should have
a. raised Argentinean interest rates and caused the Argentinean currency to appreciate. b. raised Argentinean interest rates and caused the Argentinean currency to depreciate. c. lowered Argentinean interest rates and caused the Argentinean currency to appreciate. d. lowered Argentinean interest rates and caused the Argentinean currency to depreciate.
When money serves as a mechanism for transforming current income into future purchases, it is functioning as a
A. Medium of exchange. B. Standard of account. C. Store of value. D. Standard of value.