When a Market Is Monopolistically Competitive, the Typical Firm in the Market

question 98

Multiple Choice

When a market is monopolistically competitive, the typical firm in the market can earn

• A)losses in the short run and profits in the long run.
• B)profits in the short run and the long run.
• C)losses in the short run and zero profit in the long run.
• D)zero profit in the short run and losses in the long run.

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Definitions:

Units

Fundamental quantities used to measure, count, or quantify objects or events.

Diminishing Marginal Utility

See Law of Diminishing Marginal Utility.

Satisfaction

The contentment one feels when one's needs, desires, or expectations are fulfilled or surpassed.

Diminishing Marginal Utility

A principle stating that as a consumer consumes more of a good or service, the utility (satisfaction) gained from each additional unit decreases.