The Entry and Exit of Firms in a Monopolistically Competitive

question 163

Multiple Choice

The entry and exit of firms in a monopolistically competitive market guarantee that

• A) marginal revenue equals marginal cost, and average total cost is minimised.
• B) firms can earn economic profits in the long run.
• C) price equals average total cost in the long run.
• D) firms can earn economic profits in the short run.

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