Asked by
Jenny Lynch
on Nov 16, 2024
Verified
A markup of price over marginal cost is inconsistent with free entry and zero profit.
Markup
The difference between the cost of a product or service and its selling price, expressed as a percentage of the cost.
Marginal Cost
The additional total expense incurred from producing one more unit of a product or service.
Free Entry
A market condition where firms can freely enter or exit the industry without facing significant barriers to entry.
- Understand the impact of free entry and exit on long-term profits in monopolistically competitive markets.
Verified Answer
CS
Learning Objectives
- Understand the impact of free entry and exit on long-term profits in monopolistically competitive markets.