A monopolistically competitive industry does not display _______ in either the short-run, when firms are making _______, nor in the long-run, when firms are earning _______.
A) allocative efficiency; profits and losses; negative profits
B) productive efficiency; profits and losses; zero profits
C) productive and allocative efficiency; profits and losses; zero profits
D) productive and allocative efficiency; profits and losses; negative profits

Question

Quizplus · Accepted Answer

Monopolistically competitive industries do not achieve productive or allocative efficiency in either the short-run, when firms can make profits or losses, or in the long-run, when they earn zero economic profits due to the entry and exit of firms until only normal profits are made.

A Monopolistically Competitive Industry Does Not Display _______ in Either