In the Long Run, What Level of Economic Profits Can

question 95

Multiple Choice

In the long run, what level of economic profits can a monopolistic competitor expect to receive?

• A) positive
• B) zero
• C) negative
• D) either negative or positive, depending on the demand for its product and its costs

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Definitions:

Promissory Estoppel

A legal principle preventing a party from backing out of a promise made, when the other party has relied on that promise to their detriment.

Consideration

The value (usually money, service, or goods) exchanged between parties in a contract that compels them to fulfill their mutual obligations.

Preexisting Duty

An obligation that a party is already bound to by law or by some other agreement. The party may not use this as consideration in a new contract.

Promissory Estoppel

A judicial principle that stops one from retracting a pledge given to another if the latter has justifiably depended on the promise to their disadvantage.