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The Reason Monopolistically Competitive Firms Have Difficulty Maintaining a Profit

Question 38

Multiple Choice

The reason monopolistically competitive firms have difficulty maintaining a profit in the long run is that


A) buyers refuse to pay higher prices over time.
B) costs tend to increase as production rises.
C) ease of entry into the market encourages new firms to enter and force down the price.
D) income taxes paid by the firms rise as their profits rise.

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