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

question 20

Multiple Choice

In theory, in the long run, monopolistically competitive firms earns 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:

Context and Memory

The way in which the situation or environment in which information is learned can affect recall of that information.

Depth of Processing

A theory suggesting that the depth (shallow to deep) at which information is thought about affects the duration and strength of memory of that information.

Tip-of-the-Tongue

The phenomenon of failing to retrieve a word from memory, combined with partial recall and the feeling that retrieval is imminent.

Syllables

Units of organization for a sequence of speech sounds, typically containing a vowel sound with or without surrounding consonants, forming the building blocks of words.