The Model of Monopolistic Competition Characterizes the Market for Plumbing

question 234

Multiple Choice

The model of monopolistic competition characterizes the market for plumbing services.This market is initially in long-run equilibrium,but then there is an increase in the market demand for plumbing services.We expect that in the long run,the economic profits of typical firms will be:

• A)typical of those earned by monopoly firms.
• B)negative.
• C)zero.
• D)positive but less than the level typically earned by monopoly firms.

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Definitions:

Policy Activists

Individuals or groups advocating for changes in public policy to advance particular goals or interests.

Non-Interventionists

Individuals or policies favoring minimal diplomatic and military involvement by a country in the affairs of other nations.

Monetarists

Economists who emphasize the role of governments in controlling the amount of money in circulation to regulate the economy and control inflation.

Classical Economic Theory

A school of thought in economics that emphasizes free markets, the importance of limited government intervention, and the role of supply and demand in an economy.