Which of the Following Statements Is TRUE About the Economic

question 201

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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