If a Monopolistically Competitive Firm Is Making Positive Economic Profits

question 13

Multiple Choice

If a monopolistically competitive firm is making positive economic profits, we would expect:

• A) either exit from or entry into the industry
• B) the entry of new firms into the industry
• C) the firm to continue making positive profits
• D) the exit of some firms from the industry

Acknowledge the impact of culture and societal values on psychology.

Recognize the ethical considerations in psychological research and practice.

Understand the significance of human behavior and mental processes in different contexts.

Identify the principles of humanistic psychology and its focus on personal fulfillment.

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Definitions:

Dividend Payout Ratio

A financial metric that measures the percentage of a company's earnings paid out to shareholders as dividends.

Sustainable Growth Rate

Refers to the maximum growth rate a firm can achieve without needing to increase its financial leverage.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders in dividends, represented as a percentage of the company's total earnings.

Retained Earnings

Retained earnings are the portion of a company's net profits that are kept within the company instead of being paid out to the shareholders as dividends. This reinvestment is often used for business expansion or to pay off debt.