Multiple Choice
When a profit-maximizing firm in a monopolistically competitive market charges a price higher than marginal cost,
A) the firm must be earning a positive economic profit.
B) the firm may be incurring economic losses
C) there is a deadweight loss to society, but it is exactly offset by the benefit of excess capacity.
D) new firms will enter the market in the long run.
Correct Answer:
Verified
Correct Answer:
Verified
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