What Will Be the Long-Run Result of New Firms Entering

question 113

Multiple Choice

What will be the long-run result of new firms entering a monopolistically-competitive industry?

• A)The price charged by the representative firm will be equal to marginal cost.
• B)The representative firm will certainly incur losses.
• C)While the representative firm will not make economic profits,it will be able to make normal profits.
• D)The representative firm will be able to maintain economic profits.

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Definitions:

Trade Wars

Economic conflicts between countries characterized by increasing tariffs or other trade barriers on each other's goods.

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Individuals who belong to a group, organization, or a community, sharing common interests or goals.

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Experts or academics specializing in the study, interpretation, and teaching of law.

Euro

The official currency of the eurozone, which is used by 19 of the 27 European Union countries, and is one of the world's major currencies.