In Monopolistically Competitive Markets,what Does the Property of Free Entry

question 57

Multiple Choice

In monopolistically competitive markets,what does the property of free entry and exit suggest

• A)The market structure will eventually be characterized by perfect competition in the long run.
• B)All firms earn zero economic profits in the long run.
• C)Some firms will be able to earn economic profits in the long run.
• D)Some firms will be forced to incur economic losses in the long run.

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Definitions:

Liabilities

Financial obligations or debts that an entity is required to pay to another entity in the future.

Currency

The system of money in general use in a particular country or region, acting as a medium of exchange.

Forward Contract

A customized contract between two parties to buy or sell an asset at a specified price on a future date.

Exchange Gain

The profit resulting from foreign exchange transactions and the fluctuation in exchange rates, realizing a higher value in the home currency.