In Theory, in the Long Run, Monopolistically Competitive Firms Earns

question 52

Multiple Choice

In theory, in the long run, monopolistically competitive firms earns zero profits.However, in reality there are some ways by which a firm can avoid losing profits.Which of the following is one such way?

• A)Gradually increase the markup on the goods produced
• B)Lower the price of its products to expand its market share
• C)Identify new markets and develop products precisely for those markets
• D)Find a market niche and keep it as narrow as possible so as to prevent other producers from entering this market segment

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Definitions:

Production Targets

Specific goals or quotas set for the amount of goods or services to be produced within a certain timeframe.

Performance Efficiency

Measures how well an individual, group, or organization uses resources to achieve objectives with minimum waste.

Social Networking

The use of dedicated websites and applications to interact with other users, or to find people with similar interests to oneself.

Career Advancement

The process of moving up in the hierarchy of an organization or field, often accompanied by increased responsibilities and compensation.