In the Long Run,firms in Monopolistic Competition Make Zero Economic

question 55

Multiple Choice

In the long run,firms in monopolistic competition make zero economic profit.When firms make zero economic profit,in the long run they exit the industry.

• A) The first sentence is correct and the second sentence is incorrect.
• B) The first sentence is incorrect and the second sentence is correct.
• C) Both sentences are correct.
• D) Both sentences are incorrect.
• E) More information about the presence or absence of barriers to entry and exit is needed to determine if the statements are true or false.

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Definitions:

Sufficient Consideration

Consideration in contract law that is adequate and meets legal requirements, ensuring the contract is binding and enforceable.

Promissory Note

A financial document in which one party promises to pay another party a specified sum of money at a defined future date or on demand.

Payable

Refers to the amount of money that is owed by an individual or organization and is due to be paid.

Shelter Principle

A legal concept in real estate and commerce that protects the rights of a subsequent buyer of property if the immediate seller had legitimate rights to transfer it.