This Question: 1 pt 1 9 of so (6 comtete for monopolistically competive irms is

Question

This Question: 1 pt 1 9 of so (6 comtete for monopolistically competive irms is it always ikely in the long-nun to have zero-aconomic profir? Monopolisticaly compettive firms in the long-run O A. will not continue to earn proft bacause monopolistically compottive fims produce identical products O B. may continue to earn profit by convincing consumers ther products are difterent O C. may continue to eam profit by instead beginning to produce a product identical to competitors O D. will continue to eam proft due to bamers to new firms entening the market O E. will not continue to earn profit because the cost uf production will nse as now 5irms enter the morkot

Explanation / Answer

Monopolistic competitive firms in the long run..

May continue to earn profit by convincing consumers their products are different.

It is so because monopolist competitive firms produces differentiate products which give them a partial control over the price of the product and people or consumers are ready to pay high only when they get something different from the other products, so the firm in monopolistic competitive market may earn economic profit even in the long run, if the consumers are convinced that the firm is providing some different product than others.

So option b) is correct.

Option a) is incorrect because monopolist competitive firms do not produce identical products.

Option C) is incorrect because these firms produce differentiate product not identical products.

Option D) is incorrect because there is hardly any barrier to entry and exit in a monopolistic competitive market.

Option E) is incorrect because in some cases the monopolist competitive firms able to earn economic profit.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.