Which of the Following Statements Is True About the Economic

question 302

Multiple Choice

Which of the following statements is true about the economic profits earned by a monopolistic competitor firm in the long run?

• A) Economic profits can be positive since firms have some degree of monopoly power.
• B) Economic profits will be positive since the firm has a downward sloping demand curve.
• C) Economic profits will tend towards zero since positive profits will attract new firms into the industry.
• D) Economic profits can be negative since there is so much competition in the market.

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Definitions:

Type of Power

Refers to the various ways in which power can be expressed or wielded, such as through authority, persuasion, or force.

Expert Power

The influence one possesses as a result of one's experience, skills, or knowledge in a particular domain.

Authorities

Authorities are individuals or organizations that hold the power to make decisions, enforce rules, and govern within a certain area or domain.

Legislative Advocacy

The act of attempting to influence decisions made by legislators or officials in the government, usually to pass, reform, or repeal laws.