Asked by
Yvonne Huang
on Nov 05, 2024
Verified
Refer to Figure 15.5. In the long run in this monopolistically competitive industry,
A) some firms will enter the industry and industry profits will increase.
B) some firms will leave the industry until the remaining firms break even economically.
C) all firms will leave the industry.
D) product supply will increase so prices will go up.
Monopolistically Competitive
A market structure in which many firms sell products or services that are similar but not identical, allowing for competition on factors other than price.
Long Run
A period in which all factors of production and costs are variable, allowing for adjustments in production processes.
Industry Profits
The total earnings of companies within a particular industry, after subtracting all costs from total revenue.
- Examine the dynamics of entry and exit in monopolistically competitive markets and their impact on profits.
- Distinguish between short-run and long-run equilibria in monopolistically competitive markets.
Verified Answer
DR
Learning Objectives
- Examine the dynamics of entry and exit in monopolistically competitive markets and their impact on profits.
- Distinguish between short-run and long-run equilibria in monopolistically competitive markets.