If Short-Run Economic Profits Are Greater Than Zero for Firms

question 14

Multiple Choice

If short-run economic profits are greater than zero for firms in a monopolistically competitive market, in the long run we expect

• A) entry barriers to prevent competing firms from entering this market.
• B) the demand curve for firms in the market to shift to the right.
• C) competing firms to enter the market and sell similar products.
• D) profits to increase.

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Definitions:

Breach of Contract

A breach of contract occurs when one party in a binding agreement fails to fulfill their obligations as stipulated in the contract, allowing the other party to seek legal remedy.

Solicitation

The act of seeking to obtain something, often business or trade, by making a direct or indirect request.

Commercial Reasonableness

A principle requiring a party to act in a fair, honest, and reasonable manner in business transactions.

Statutory Irrevocability

Statutory irrevocability refers to a condition or status where certain rights, decisions, or agreements are made non-reversible by statute or law.