Due to the Entry and Exit of Firms in a Monopolistically

question 118

Multiple Choice

Due to the entry and exit of firms in a monopolistically competitive market:

• A) economic profits and economic losses are dissipated in the long run.
• B) economic profits persist in the long run, but not economic losses.
• C) economic losses will exist in the long run, but not economic profits.
• D) both economic profits and economic losses exist in the long run.

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Definitions:

Minimum Efficient Scale

The lowest level of output at which a firm can minimize long-run average total cost.

U.S. Agriculture

The sector of the United States economy that deals with the production of plants and animals for food, fiber, and other products.

Farm Share

The portion of the final retail price of agricultural products that goes back to the farmers.

U.S. GDP

U.S. Gross Domestic Product reflects the total monetary or market value of all the finished goods and services produced within the United States' borders in a specific time period.