In Theory, in the Long Run, Monopolistically Competitive Firms Earn

question 63

Multiple Choice

In theory, in the long run, monopolistically competitive firms earn zero profits.However, in reality there are some ways by which a firm can avoid losing profits.Which of the following is one such way?

• A)gradually increase the mark-up on the goods produced
• B)lower the price of its products to expand its market share
• C)identify new markets and develop products precisely for those markets
• D)find a market niche and keep it as narrow as possible so as to prevent other producers from entering this market segment

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Definitions:

Depolarize

The process by which a cell, such as a neuron, decreases its electrical charge, often making it more likely to produce an electrical signal.

Sodium Ions

Positively charged particles (Na+) formed when sodium atoms lose an electron, crucial for various physiological processes including nerve impulse transmission and muscle contraction.

Neuron

A unique cell responsible for conveying nerve signals; known as a neuron.

Action Potential

A rapid, temporary change in electric charge across a cell membrane, resulting in the transmission of nerve impulses.