When Firms in Monopolistic Competition Are Making an Economic Profit

question 260

Multiple Choice

When firms in monopolistic competition are making an economic profit, firms will

• A) enter the industry, and demand will increase for the original firms.
• B) exit the industry, and demand will increase for the firms that remain.
• C) exit the industry, and demand will decrease for the firms that remain.
• D) enter the industry, and demand will decrease for the original firms.

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Definitions:

Income Inequality

The lopsided distribution of economic income among different members, such as individuals or families, within an economy.

Gini Ratios

A measure of income inequality within a population, ranging from 0 (perfect equality) to 1 (perfect inequality), where a higher Gini coefficient indicates higher inequality.

Income Inequality

The uneven distribution of income within a population, leading to gaps between the wealthiest and poorest individuals.

Standard Census

A government-enumerated survey conducted at regular intervals that collects comprehensive demographic, social, and economic data about the population.