In Theory, in the Long Run, Monopolistically Competitive Firms Earn

question 63

Multiple Choice

In theory, in the long run, monopolistically competitive firms earn zero profits.However, in reality there are some ways by which a firm can avoid losing profits.Which of the following is one such way?

• A)gradually increase the mark-up on the goods produced
• B)lower the price of its products to expand its market share
• C)identify new markets and develop products precisely for those markets
• D)find a market niche and keep it as narrow as possible so as to prevent other producers from entering this market segment

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Definitions:

LEO

Low Earth Orbit, referring to a satellite system orbiting relatively close to Earth, used for telecommunications, weather, and observation.

MEO

Medium Earth Orbit, a region of space around the Earth above low Earth orbit (LEO) and below geostationary orbit (GEO), typically used for navigation and communication satellites.

Orbital Speed

The speed at which an object must travel to maintain its orbit around a celestial body, determined by the gravitational pull of the body and the distance from it.

GEO

Geostationary Earth Orbit; a circular orbit 35,786 kilometers above the Earth's equator and following the direction of the Earth's rotation.