If Economic Profits Are Earned in a Monopolistically Competitive Market

question 13

Multiple Choice

If economic profits are earned in a monopolistically competitive market,

• A)More firms will enter the market.
• B)The market supply curve will shift to the left.
• C)Price will rise.
• D)The market demand curve will shift to the right.

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Definitions:

Differentiation Strategy

A business approach where a company develops unique products or services to stand out from competitors.

Organic Structure

An organizational format that is flexible, with low levels of formalization, wide spans of control, and decentralized decision-making.

Centralized

A system or organization where decision-making and the control of activities are concentrated in a central location or group.

Cost Leadership Strategy

A business approach aimed at becoming the lowest-cost producer in an industry to gain a competitive advantage.