To Maximize Their Profits and Defend Those Profits from Competitors

question 122

Multiple Choice

To maximize their profits and defend those profits from competitors, monopolistically competitive firms must

• A)lobby government to erect barriers to entry in their industries.
• B)limit foreign competition in their markets by encouraging the government to impose tariffs and other trade restrictions.
• C)differentiate their products.
• D)achieve economies of scale.

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Definitions:

Restrictive Covenant

A clause in a contract that limits certain actions of the parties involved, often used in employment and real estate agreements.

Amortized Debt

A loan in which the principal and interest are paid off in equal installments over a predetermined period.

Coupon

The periodic interest payment made to the bondholders during the life of the bond.

Call Provisions

Terms in a bond or other fixed-income security's contract that allow the issuer to repay the debt before its maturity date.