If a Monopolistically Competitive Firm Is Making Positive Economic Profits

question 2

Multiple Choice

If a monopolistically competitive firm is making positive economic profits we would expect

• A)Entry of other firms
• B)The firm to continue making the positive economic profits
• C)The firm to expand market share and the industry to move toward an oligopoly structure
• D)The firm to hire more labor

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Definitions:

AGI

Adjusted Gross Income, which is gross income minus adjustments; a key measure used to determine tax liabilities and eligibility for credits.

EIC

Earned Income Credit; a refundable tax credit in the U.S. for low to moderate-income working individuals and families, particularly those with children.

Qualifying Children

are dependents who meet certain conditions regarding relationship, age, residency, and support, affecting tax benefits.

AGI

Adjusted Gross Income, which is gross income minus specific deductions, used to calculate an individual's tax liability.