Consider Monopoly, Monopolistic Competition, and Perfect Competition

question 141

Multiple Choice

Consider monopoly, monopolistic competition, and perfect competition. In which of these three market structures does a profit-maximizing firm experience zero economic profit?

• A)perfect competition only
• B)perfect competition and monopolistic competition only
• C)perfect competition, monopolistic competition, and monopoly
• D)The answer cannot be determined without knowing whether the market is in the long run or short run.

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Definitions:

Patent

A government-granted exclusive right to an inventor, allowing them the sole right to make, use, and sell an invention for a certain period of time.

Socially Optimal Outcome

A state in which a market or economy operates at peak efficiency, distributing resources in a way that benefits the maximum number of people.

Antibiotic-Resistant Diseases

Infections caused by bacteria that have evolved the ability to survive treatment with antibiotics that were previously effective against them.

Antibiotics

Medicinal substances used to treat bacterial infections by either killing the bacteria or inhibiting its growth.