Exhibit 10-2 a Monopolistic Competitive Firm

question 1

Multiple Choice

Exhibit 10-2 A monopolistic competitive firm
-If all firms in a monopolistic competitive industry have demand and cost curves like those shown in Exhibit 10-2, we would expect that in the long run:

• A) all firms will leave the industry.
• B) some firms will leave the industry.
• C) firms in the industry earn zero economic profits.
• D) a number of new firms will enter the industry.

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Definitions:

Creditor Relationship

The financial and business dynamics between a creditor, who extends credit, and a debtor, who owes the creditor money.

Owner Relationship

The legal and managerial relationship between the owner(s) of a business and the business entity itself.

Automotive Parts

Components and replacements parts specifically designed for use in motor vehicles, including both original equipment (OEM) and aftermarket parts.

Journal Entries

Entries made in the bookkeeping system of a business to record financial transactions, including details of debits and credits involved.