Why Do Most Firms in Monopolistic Competition Typically Make Zero

question 238

Multiple Choice

Why do most firms in monopolistic competition typically make zero profit in the long run?

• A)because firms produce differentiated products
• B)because the lack of entry barriers would compete away profits
• C)because firms do not produce at their minimum efficient scale
• D)because the total market is not large enough to accommodate so many firms

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Definitions:

Cognitive Resources

The mental capacity and abilities available to an individual for thinking, reasoning, and problem-solving.

Short-term Storage

The part of the memory system where information is temporarily held before it is either forgotten or transferred to long-term memory.

Procedural Memory

A type of long-term memory for performing certain types of tasks or procedures, such as riding a bike or typing, without conscious awareness of the previous experiences.

Bicycling

The use of a bicycle for transportation, recreation, exercise, or sport.