Multiple Choice
Why can't an economist say for certain that a monopolistic competitive firm will always earn zero economic profits in the long run?
A) Barriers to entry are significant in monopolistic competition.
B) The very large number of buyers indicates that there will always be demand for the firm's product.
C) The firms in the industry do not produce identical products.
D) The firms practice price competition, so at least some firms will always be charging a lower price than other firms and will sell more as a result.
E) The firms face a horizontal demand curve.
Correct Answer:

Verified
Correct Answer:
Verified
Q121: Suppose an industry is made up of
Q122: Some economists contend that a monopolistic competitor
Q123: List and describe the three defining assumptions
Q124: One of the key characteristics of oligopoly
Q125: Concentration ratios are often used to determine
Q127: The assumption that precludes economic profits in
Q128: If a market is contestable, then<br>A)a cartel
Q129: If two firms that form a cartel
Q130: Cartels often dissolve because<br>A)their members often set
Q131: In long-run equilibrium, a monopolistic competitive firm