When a Firm in a Monopolistically Competitive Market Earns Zero

question 242

True/False

When a firm in a monopolistically competitive market earns zero economic profit, its product price must equal marginal cost.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, which can enter into contracts, own assets, sue and be sued.

Piercing the Corporate Veil

A legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders or directors.

Creditors

Individuals or institutions that extend credit or lend money to others with the expectation of being repaid, usually with interest.