In a Monopolistically Competitive Market Structure, the Force That Leads

question 80

Multiple Choice

In a monopolistically competitive market structure, the force that leads to zero economic profits in the long run is:

• A)excess capacity.
• B)price wars among firms.
• C)the entry of new firms into the industry.
• D)excessive advertising.
• E)differentiated products.

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Definitions:

Adjusting

The process of making entries to update internal accounts for events that have transpired but are not yet recorded at the end of an accounting period.

Cash Basis

An accounting method where revenues are recognized when cash is received, and expenses are recorded when cash is paid out.

Accounting

The systematic process of recording, summarizing, and analyzing an organization's financial transactions.

GAAP

Generally Accepted Accounting Principles; the common set of accounting standards and procedures used in the U.S.