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

question 176

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) the average cost of production to decrease.
• D) the average cost of production to increase.

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Definitions:

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The act of holding oneself responsible for an event or situation, often inappropriately.