The Chamberlin model has been criticized for all but which one of the following reasons?
A)The concept of an industry group is ambiguous in the model.
B)The model adds little to the perfect competition conclusions.
C)Consumers are not as willing to switch from one product another for slight price changes.
D)The model predicts no long-run profits but does not account for entry and exit in markets.

Question

Quizplus · Accepted Answer

The Chamberlin model does account for entry and exit in markets, which is why it predicts no long-run profits due to the entry of new firms eroding any economic profits.

The Chamberlin Model Has Been Criticized for All but Which