In Theory,in the Long Run,monopolistically Competitive Firms Earn Zero Profits

question 40

Multiple Choice

In theory,in the long run,monopolistically competitive firms earn zero profits.However,in reality,there are some ways by which a firm can avoid losing profits.Which of the following is one such way?

• A) Gradually increase the markup on the goods produced
• B) Lower the price of its products to expand its market share
• C) Identify new markets and develop products precisely for those markets
• D) Find a market niche and keep it as narrow as possible so as to prevent other producers from entering this market segment

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Definitions:

Lymph Tissue

Specialized connective tissue that contains large numbers of lymphocytes and is involved in the immune response and the maintenance of bodily fluids levels.

Oral Cavity

The mouth, or buccal cavity, which is the first part of the digestive system and where the mechanical breakdown of food begins.

Blood Pressure

The force exerted by circulating blood upon the walls of blood vessels, essential for the functioning of the circulatory system.

Hormones

Biochemical substances produced in small amounts by specialized cells in organisms, transported in tissue fluids to stimulate specific cells or tissues into action.