Is It True That in the Long Run,a Monopolistically Competitive

question 78

Essay

Is it true that in the long run,a monopolistically competitive firm has market power but earns no profit? Explain.

---

Definitions:

Long Run

A period in which all factors of production and costs are variable, allowing for full adjustment to changes.

Excess Capacity

Excess Capacity refers to a situation where a company can produce more goods than the market demands, often leading to unused resources.

Economists

Experts who study, describe, and predict patterns relating to the economy, including aspects of production, consumption, and the distribution of goods and services.

Diversity Of Products

Refers to the variety of different items a company offers to meet the varied preferences of its consumers.