Why Can't an Economist Say for Certain That a Monopolistic

question 126

Multiple Choice

Why can't an economist say for certain that a monopolistic competitive firm will always earn zero economic profits in the long run?

• A)Barriers to entry are significant in monopolistic competition.
• B)The very large number of buyers indicates that there will always be demand for the firm's product.
• C)The firms in the industry do not produce identical products.
• D)The firms practice price competition, so at least some firms will always be charging a lower price than other firms and will sell more as a result.
• E)The firms face a horizontal demand curve.

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Definitions:

Minority Cultures

Groups within a larger society that maintain unique cultural identities, often underrepresented and having different ethnic, linguistic, or religious characteristics from the dominant group.

Majority Culture

Refers to the cultural values, beliefs, and practices that are dominant in a particular society or organization.

Status Quo Leader

A leader who prefers maintaining current conditions or practices within an organization rather than seeking change or innovation.

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