As long as firms currently in a monopolistically competitive market are earning

Question

As long as firms currently in a monopolistically competitive market are earning profits:

Payoffs are:

As long as firms currently in a monopolistically competitive market are earning profits:

there must be large barriers to entry. the government will step in to regulate prices to ensure they stay competitive. more firms will leave the market before the profits are competed away. more firms will enter the market with products that are close substitutes.

Payoffs are:

things that are only enjoyed by the winner. payments made to gain some advantage unfairly during a game. the rewards that come from particular actions. always monetary.

Explanation / Answer

1) As long as firms currently in a monopolistically competitive market are earning profits-

-more firms will enter the market with products that are close substitutes

Monopolistically is a market structure which is a combination of monopoly and perfectly competitive market so there is freedom of entry and exit and in case of super normal profits,more firms will enter the market with close substitutes.

2) Payoffs are-

-the rewards that come from particular action

The payoffs are the result of following a particular course of action.Payoffs represents the motivations of players.They can be cardinal or continuous measures which represents profits,quantity or utility or they can be ordinal which simply states the rank of desirability of outcomes.

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