If a Monopolistically Competitive Firm Is Earning Above-Normal Profits, Then

question 119

True/False

If a monopolistically competitive firm is earning above-normal profits, then in the long run its demand will shift to the right and become more elastic.

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Definitions:

Costs

The monetary value that a company incurs to produce goods or services, which may include expenses related to labor, materials, and overhead.

CCA Class

Stands for Capital Cost Allowance Class, a categorization in Canadian tax law used to determine the depreciation rate for tax purposes on tangible capital assets.

Book Value

The net value of a company's assets, minus its liabilities and intangible assets, as recorded on the balance sheet.

Depreciated

Describes the reduction in value of an asset over time, often due to wear and tear or obsolescence.