If Firms in Monopolistic Competition Are Making Economic Profits,eventually

question 102

Multiple Choice

If firms in monopolistic competition are making economic profits,eventually

• A) they shut down.
• B) they exit the industry.
• C) the market turns into a monopoly.
• D) new firms enter the industry.
• E) the firms in the market increase their production so that their economic profit disappears.

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Definitions:

Fund Manager

An individual responsible for making investment decisions for a portfolio of securities, implementing investment strategies for a mutual fund or institutional investor.

Shareholders

Individuals or entities that own shares in a corporation and therefore have an ownership interest in the company.

Privately-Held Firms

Businesses whose ownership is private, meaning their shares are not traded on public stock exchanges.

Securities

Financial instruments that represent ownership positions in corporations (stocks), creditor relationships with corporations or governmental bodies (bonds), or rights to ownership as represented by an option.