In Theory, in the Long Run, Monopolistically Competitive Firms Earn

question 63

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 mark-up 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:

Specialization

A focus on a particular area of expertise within a profession, leading to increased efficiency and skill in that area.

Scientific Management

A management theory that analyzes and synthesizes workflows, aiming to improve economic efficiency, especially labor productivity.

Training Costs

The expenses incurred by an organization for the professional development and training of its employees, which can improve skills and performance.

Work Pace

The speed at which work tasks are performed, often a point of negotiation in labor agreements concerning productivity and worker well-being.