Why does a monopolistic competitor earn zero economic profits in the long run?
What will be an ideal response?
Answer: Because firms will enter or exit all the firms are breaking even, and no new firm wants to enter the market for the positive economic profits there.
Economics
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Banks prefer to make loans than keep reserves because they earn interest on loans and must pay interest on reserves
Indicate whether the statement is true or false
Economics
An effective way to restore credibility to monetary authorities after a period of hyperinflation is
A) the introduction of a new monetary unit. B) the introduction of wage and price controls. C) a reduction in bank reserve requirements. D) the centralization of monetary and fiscal policy under a single governmental unit.
Economics