In the Long-Run Equilibrium in a Monopolistically Competitive Industry, Economic

question 30

Multiple Choice

In the long-run equilibrium in a monopolistically competitive industry, economic profits are _________ due to __________.

• A)positive; free entry into the industry.
• B)zero; monopoly power.
• C)positive; barriers to entry into the industry.
• D)zero; free entry into the industry.

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Definitions:

Retrospective Adjustment

Adjusting the financial statements of past periods to reflect the application of new accounting policies as if they had been applied all along.

Accounting Principle

Fundamental guidelines or rules that form the basis for financial accounting and reporting practices, aimed at ensuring consistency and comparability.

Comparative Financial Statements

Financial reports that show the financial position, performance, and cash flows of a company across different periods side by side for comparison.

Accounting Changes

Alterations or updates made to accounting methods, estimates, or reporting entity, which can impact the financial statements of a business.