For a Monopolistically Competitive Firm to Be Making an Economic

question 73

Multiple Choice

For a monopolistically competitive firm to be making an economic profit,

• A)the production period must be the short run.
• B)the production period must be the long run.
• C)rival firms must not exist.
• D)its rivals must also be making an economic profit.
• E)barriers to entry must exist.

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Definitions:

Market Price

The price at which a good or service is currently sold in the market.

Competitive Industry

An industry characterized by many sellers and buyers, where no single entity has the market power to influence prices significantly.

Short Run

A period in economics during which the quantity and quality of one or more production factors remain unchanged.

Market Price

The ongoing price for buying or selling a service or asset.