Why Do Most Firms in Monopolistic Competition Typically Make Zero

question 152

Multiple Choice

Why do most firms in monopolistic competition typically make zero profit in the long run?

• A)Because firms produce differentiated products
• B)Because the lack of entry barriers would compete away profits
• C)Because firms do not produce at their minimum efficient scale
• D)Because the total market is not large enough to accommodate so many firms

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Definitions:

Cynical View

A perspective that generally mistrusts or doubts the sincerity and goodness of human motives and actions.

Negative Affectivity

Describes a personality trait characterized by a pervasive pattern of negative emotions and poor self-concept.

Instrumental Value

Values or beliefs that are viewed as a means to achieving desired ends, guiding behavior towards achieving certain goals.

Self-Respect

A positive valuation of oneself, characterized by feelings of worth and dignity.