Why don't some firms in monopolistic competition earn losses in the long run?
A) The firms have enough monopoly power to ensure they always earn profits.
B) Free entry allows enough firms to remain in the market and maintain the critical mass of firms required to attract customers.
C) Free exit implies that any unprofitable firms leave the market in the long run.
D) In the long run, firms will build enough brand loyalty among customers to ensure a profitable level of sales.
Correct Answer:
Verified
Q1: Monopolistically competitive firms have monopoly power because
Q3: The authors cited statistical evidence that the
Q4: Which of the following is true of
Q5: Q6: Excess capacity in monopolistically competitive industries results Q7: For which of the following market structures Q8: A market with few entry barriers and![]()
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents