In Monopolistic Competition in the Long Run,firms ________

question 46

Multiple Choice

In monopolistic competition in the long run,firms ________.

• A) make zero economic profit and require more capacity
• B) incur an economic loss and require more capacity
• C) make an economic profit and have excess capacity
• D) make zero economic profit and have excess capacity
• E) make an economic profit and require more capacity

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Definitions:

Keynesian Economists

Economists who believe that demand-side factors are critical in determining the level of economic activity, advocating for government intervention to manage demand.

Macroeconomic Policy

Strategies and actions taken by a government or central bank to regulate and control the economy as a whole, including fiscal and monetary policies.

Full Employment

When a society’s resources are all being used with maximum efficiency.

Monetarists

Monetarists believe in controlling the supply of money as a method for regulating the economy and combating inflation.