In the long run, all the firms in an industry that monopolistically competitive:

A. Incur an economic profit

B. Make zero economic profit

C. Set price equal to marginal

D. Produce at their efficient scale.

E. Make an economic profit.

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Alice SejakeLv10

5 Mar 2021

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Related questions

Tell whether the following is true or false and explain why.

a. In the long-run, purely competitive firms and monopolistically competitive firms earn zero economic profit (normal profit) and both will produce allocatively efficient outputs.

b. Monopolistically competitive firms and oligopoly firms typically earn zero economic profit in the long-run.

c. The kinked demand model of oligopoly allows for the possibility that cost functions, including marginal cost, can shift without changing the quantity and price of profit-maximizing output.

d. Non-price competition refers to reductions in production costs that are not reflected in price reductions.

e. If a natural monopolist engages in marginal cost pricing, it typically will earn abnormal profits.

purplehyena833

In the short run, a monopolistically competitive firm will

A. may incur an economic loss

B. will leave the industry if it is incurring an economic loss

C. either earns an economic profit or breaks even

D. incurs an economic loss if it fails to produce the quantity at which marginal revenue equals marginal cost

coralrabbit151

Monopolistically competitive firms

a.	are guaranteed to earn a short-run economic profit
b.	may earn short-run economic profits, although long-run economic profit is typically zero
c.	may earn economic profit both in the short run and in the long run
d.	earn zero economic profit both in the short run and in the long run
e.	can only earn an economic profit in the inelastic portion of their demand curves