Asked by Nicole Mowatt on Jul 03, 2024
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In the long run, a representative firm in a monopolistically competitive industry will end up
A) having an elasticity of demand that will be less than it was in the short run.
B) having a larger number of competitors than it will in the short run.
C) producing a level of output at which marginal cost and price are equal.
D) earning a normal profit, but not an economic profit.
Monopolistically Competitive Industry
A commercial setup in which various enterprises market goods that are comparable, though not identical, granting them a measure of control within the marketplace.
Elasticity Of Demand
An indicator of the level of change in consumer demand for a product based on fluctuations in its price.
Normal Profit
The minimum level of profit needed for a company to remain competitive in the market; it occurs when total revenues are equal to total costs, including opportunity costs.
- Understand the elements necessary for the establishment of long-term equilibrium in markets operating under monopolistic competition.
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Learning Objectives
- Understand the elements necessary for the establishment of long-term equilibrium in markets operating under monopolistic competition.
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