In the Short Run, a Monopolistically Competitive Firm Can Earn

question 248

Multiple Choice

In the short run, a monopolistically competitive firm can earn

• A) positive profits only.
• B) zero profits only.
• C) zero or positive profits only.
• D) zero, positive or negative profits.

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Definitions:

Government Restrictions

Regulatory measures imposed by governmental bodies that can limit or direct the actions of individuals or organizations.

Labor

Human effort, both physical and mental, used in the production of goods and services.

Production Possibilities

The various combinations of goods and services that can be produced from a fixed set of resources.

Circular-Flow Diagram

An economic model depicting how money, goods, and services move through an economy between households and firms.