In Monopolistic Competition,product Differentiation Causes

question 99

Multiple Choice

In monopolistic competition,product differentiation causes

• A)the firms to earn economic profits in the long run
• B)a horizontal demand curve for each firm's output
• C)the firms to operate with excess capacity
• D)significant barriers to entry
• E)high concentration ratios

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Definitions:

Screening Decision

A decision as to whether a proposed investment project is acceptable.

Salvage Value

The projected remaining worth of an asset after its lifespan has ended.

Net Operating Income

The profit a company makes from its core operations, excluding expenses and revenues from non-operating activities.

Payback Period

The length of time required to recover the original investment in a project or asset, based on its expected cash flows.