A Firm in Long-Run Equilibrium Under Monopolistic Competition Will Earn

question 2

Multiple Choice

A firm in long-run equilibrium under monopolistic competition will earn

• A) zero economic profits because of free entry.
• B) positive monopoly profits because each sells a differentiated product.
• C) positive oligopoly profits because each firm sells a differentiated product.
• D) negative economic profits because it has economies of scale.
• E) positive economic profit if it engages in international trade.

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Definitions:

Binomial Distribution

The binomial distribution is a probability distribution that summarizes the likelihood of obtaining a fixed number of successes in a fixed number of trials with a specific probability of success in each trial.

Expected Value

A statistical concept representing the average outcome of a random variable over a large number of experiments or trials.

Binomial Probability Distribution

A probability distribution that summarizes the likelihood that a value will take one of two independent values under a given set of parameters or conditions.

Expected Number

A statistical term referring to the average value or mean of a random variable, calculated as the sum of all possible values each multiplied by its probability of occurrence.