Why can't a monopolistic competitor earn economic profits in the long run?
What will be an ideal response?
A monopolistic competitor may earn economic profits in the short run. In the long run, however, other firms will enter the market and produce substitutes for the product so that any economic profits earned by the existing firms will disappear due to competition. This means that the monopolistic competitor will earn zero economic profits in the long run.
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The break-even point is defined as occurring at an output rate at which
A) total revenue equals total opportunity cost. B) economic profit is maximized. C) marginal revenue equals marginal cost. D) total cost is minimized.
Bid-rigging is more likely when
a. auctions are larger b. auctions are infrequent c. auctions generate the same set of potential bidders d. the auctioneer is paid on commission rather than a fixed fee