Firms in Monopolistic Competition Make Zero Economic Profit in the Long

question 56

Multiple Choice

Firms in monopolistic competition make zero economic profit in the long run because

• A)their costs rise over time.
• B)the demand they face decreases as rival firms offer slightly differentiated products for sale in the same market.
• C)their marginal cost curves slope upward.
• D)the market eventually becomes perfectly competitive.
• E)both A and B are correct.

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