Under the Conditions of Monopolistic Competition, If a Firm Is

question 131

Multiple Choice

Under the conditions of monopolistic competition, if a firm is earning economic profits in the short run

• A) prices are higher in the long run than in the short run.
• B) firm profits are higher in the long run than in the short run.
• C) average costs of production are higher in the long run than in the short run.
• D) long-run economic profits are positive.

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Definitions:

Market Segmentation

The process of dividing a broader market into smaller, more homogeneous groups of consumers with similar needs, characteristics, or behaviors.

Precisely Define

To specify something in a clear and exact manner, leaving no room for ambiguity or misunderstanding.

Form Utility

is the value added to products through the creation of features and function that make them more desirable to consumers.

Product Availability

The degree to which a product can be readily acquired by customers, often a critical factor in customer satisfaction and retention.