In the Long Run in a Monopolistic Competitive Industry

question 64

Multiple Choice

In the long run in a monopolistic competitive industry,

• A) economic profits will be positive.
• B) price will be driven to zero.
• C) the firm will not operate where MR = MC.
• D) economic profit will be zero.
• E) price will exceed average cost.

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Definitions:

Self-serving Bias

The common tendency to attribute successes to personal characteristics and failures to external factors.

Situational Factors

External influences or conditions that affect decision-making, behavior, or performance in varying scenarios.

External-unstable Factor

refers to outside influences that can affect behavior or outcomes but are inconsistent and unpredictable, such as luck or chance.

Pessimistic Explanatory

A cognitive style where individuals habitually attribute negative events to stable, global, and internal causes.