Solved

If the Firms in a Monopolistically Competitive Market Are Earning

Question 30

Multiple Choice

If the firms in a monopolistically competitive market are earning short-run economic profits,then


A) each existing firm will increase output in the long run as its marginal revenue curve shifts rightward
B) each firm will experience an increase in the demand for its output in the long run
C) each firm's profit will drop to normal in the long run as its demand curve shifts leftward due to entry of new firms
D) barriers to entry will enable them to earn economic profits in the long run
E) decreased demand for a key input will reduce that input's price in the long run and lower each firm's average total cost curve

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents