What Is the Primary Facet of Monopolistic Competition That Does

question 45

Essay

What is the primary facet of monopolistic competition that does not allow for the presence of long-run profits?
If firms are making short-run profits in a monopolistically competitive industry,what will eventually occur that will cause long-run economic profits to be zero?

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at par, used to finance government spending.

Treasury Securities

Government-issued debt instruments that are used to finance the national debt, offering a secure investment with fixed interest payments.

Closing Stock Quote

The final price at which a stock is traded during a particular trading day or session on a securities exchange.

Real Rate

The interest rate adjusted for inflation, providing an idea of the true return on an investment.