Question 56 (2 points) Which of the following statements is true? Monopolistic c

Question

Question 56 (2 points) Which of the following statements is true? Monopolistic competitive firms will earn economic profits in the long run because of their ability to control the price of the product. Monopolistic competitive firms that earn economic profits in the short run commonly will find their profits competed away in the long run. Monopolistic competitive firms will earn zero economic profits in both the short and the long run. Monopolistic competitive firms must earn economic profts in the long run, or they will shut down. Monopolistic competitive firms must earn economic profits in the short run, or they will shut down. Save Question 57 (2 points) a "In equilibrium, a monopolistic competitor will produce an output level that is less than the level that would minimize its average total costs." This is a statement of the law of diminishing returns.

Explanation / Answer

Solution: Monopolistic competitive firms that earn economic profits in the short run commonly will find their profits competed away in the long run

Explanation: Monopolistic competition usually exists when the market has many sellers who are selling differentiated products. The economic profits are eliminated in the long run and occurs at an output where price is equal to the long run average cost

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.