Because Economic Profits Are Eliminated in the Long Run in Monopolistic

question 48

Multiple Choice

Because economic profits are eliminated in the long run in monopolistic competition,to earn an economic profit firms continuously

• A)shut down.
• B)exit the industry.
• C)innovate and develop new products.
• D)declare bankruptcy.
• E)decrease their costs by decreasing their selling costs.

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Definitions:

Phillips Curve

An economic theory suggesting an inverse relationship between the level of unemployment and the rate of inflation within an economy.

Unemployment

The state of being jobless and actively seeking employment.

Inflation

The pace at which the universal cost levels of goods and services elevate, shrinking the value of money to buy.

Money Supply

The money supply is the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.